4 Things You Need to Open a Franchise
One of the most popular questions we get asked is, “What does it take to open a franchise?”
It’s a very important question, but for each individual person the answer is going to be slightly different. As you explore opening a specific franchise, they are going to be very clear with you about what it takes to open THEIR business.
However, at the highest level, there are four different things you’re going to need if you want to successfully open your own franchise.
Here they are:
1.Money – Every single franchise out there is going to require you to have a certain amount of capital in order to open a location. For some franchises, you need thousands of dollars and for others, you need millions. Not only are you going to be required to pay a franchise fee when you agree to become a franchisee, but you’re going to need money for real estate, supplies, payroll, etc. Often times franchises will publish a number of different financial metrics to help you understand its requirements e.g. franchise fee, liquid capital required, net worth required, initial investment, etc.
2. Time – Whether you plan on actively managing the franchise or hiring a management team to operate the franchise in your stead, owning a franchise takes time. For some people, becoming an entrepreneur means that they spend every waking hour working on the business. For others, it’s more like hiring a manager and checking in on them and the health of the business on a semi-regular basis. Either way, owning a franchise is going to take time. Make sure you’re not already burning the candle at both ends before opening a franchise.
3. Energy – This one is a little subtler and related to time, but you’re going to need quite a bit of energy. This also comes in two separate forms. The first is the energy that you need to actually operate the franchise. For certain franchises, this means moving from behind a desk and computer screen to being on your feet all day. For others, it may mean spending long hours making marketing phone calls. And for a third group, it could mean hiring lots of people. In addition, your staff is going to look to you to lead the company. So your energy level is going to be contagious. A complacent, low-energy CEO can spell disaster for any company, so make sure you’re ready to give it all you got.
4.Entrepreneurial Spirit – The last thing you’ll need is also the least tangible. Ultimately, opening a franchise is a risk. Sometimes franchises turn into multi-million dollar enterprises and other times they go bankrupt. You’ve got to be willing and ready to understand the risks and meet the challenges head on. The U.S.A. was built by people who weren’t willing to be complacent with yesterday’s answers. And you need to be in that vein. If you’re a super risk-averse person, then owning your own business may drive you crazy. But if you’re that person who’s ready to make things happen, franchising may be for you!
That’s it! Four things! Simple, isn’t it?
That’s what we always say. Opening a franchise is easier than you think. Because the franchisor handles a lot of details associated with how you run the business, the qualifications for ownership are fairly easy to understand.
So, are you ready to see which franchises are right for you?
Click here to take our brief quiz and see which franchises are looking to expand near you >>
Attending IFE's Online Expo? Here's How to Use This Virtual Event To Keep Your Pipeline Full In 2020
We sat down with Tom Portesy and Sheila Fischer from MFV, the parent company that puts on IFE, to talk about how attendees can get the most out of this online experience.
Desperate Times Means Desperate Franchise Buyers
Early in my career, I encountered a franchise buyer who had made a rash decision that turned sour quickly. The funny thing was that he was intelligent, experienced and had a great deal of corporate knowledge – all the attributes that franchisors desire for their many franchise opportunities. I was intrigued that this experienced and generally deliberate person would make such a bad decision. So what went wrong?
The Importance of Setting Clear Expectations
So my recommendation is as follows: As early in the relationship as possible, invest the time necessary to clearly describe the shared expectations for how you will work with your customers and, and how you will work with your employees. If you do this well, everyone will be on the same page and when you deliver something a little bit better than they expect, the will see you as someone they trust, like and want to be loyal to – a strong driver of success for any business.
