Starting a franchise is generally easier than starting your own business. Franchisees are usually given a blueprint that gets their franchise location up and running. Here are a few tips that you should know if you are thinking about making that commitment:
Research is a must:
- Educate yourself on the success rate of the franchise. A major advantage of purchasing a franchise is the endless amount of information available on strengths and weaknesses; so that you know what to look out for once you’re up and running.
- Thoroughly read through the franchise agreement with your lawyer. The franchise agreement is the legal document that details the rights and obligations of the franchiser and franchisee. You are dedicating up to 20 years of your life to a franchise, so it’s essential that you understand the entirety of the documentation.
- Figure out your potential franchise demographics and how it correlates with your target audience or community. Evaluate nearby competitors and their success.
- Make sure that you’re committing to a company with an experienced leadership team and franchise community that is willing to mentor you and lead you to success.
Continuous franchise fees apply:
- Investors are required to pay a franchise fee in exchange for the continuous brand marketing and employee training materials.
- The average franchise fee can run between 20,000-35,000, not including ongoing royalty fees which are typically between 5 and 6 percent of volume and start-up fees that are paid to secure franchise rights. Franchise fees are typically illustrated in the Franchise agreement.
Endless training opportunities:
- Training is paramount to franchisors. It ensures uniformity and consistency amongst all franchisees.
- Franchisors typically provide training and material support for all employees especially the investor. Franchisee owners are expected to not only handle books but unclog toilets as well, the investor is expected to know every position so make sure that you are prepared to get your hands dirty.
The show must go on:
- Franchise fees are continuous so it’s important that the location continues to grow. An advantage of being a part of a franchise is the endless marketing and support that will guide you in the right direction.
- It is the franchisee’s responsibility to maintain franchise standards and employee relations to ensure endless success.
- Franchisors usually continue to check in on the quality and success of your franchise.
Successful vs. unsuccessful:
- Franchises are judged by franchisers based on how well they abide by guidelines, collaboration, and sales.
- If the franchise is doing well, then there are more opportunities for the franchisor and franchisee to continue business and expand to other locations.
- If a franchise is not doing as well, then the franchisor has the right to forfeit or sell ownership.
If you’d like to learn more about Openwork’s franchise opportunities, visit our website to find out more here.