There are countless lessons to learn through joining a franchise.
Franchisees get more than profits.
Many people may think that franchises are just a new way to make money. They believe you take an existing business model, drop it in a new location, and watch the profits roll in. But franchise owners walk away with more than profits. They gain a greater understanding of how business works through hands-on experiences.
There's a lot to being a franchisee. You have to follow company processes. You're accountable for spreading the company name into new areas. You have to hire the right people to make it happen. And you're not even an employee yourself.
While these responsibilities may seem like a lot to take on, they're actually fantastic learning opportunities. In fact, learning from first-hand experience is one of the most valuable things about being a franchisee.
Here are some of the ways that stepping into the role of franchisee turns you into a better business owner.
You understand what a successful business model looks like.
You aren't thrown into the ring to fend for yourself as a franchisee. The franchisor is there as your partner and number one supporter. He or she provides you with a plan of action so you know how to execute. This "secret sauce" is the business playbook, the new bible for running all operations. Franchisors distribute this model to all franchisees to ensure a systematic approach to business.
As you follow these tried-and-true processes, you’ll learn more about what makes a great business model tick. You find out what type of support you need and the questions you should ask. You’ll also realize which tools you need for success, like marketing materials or advertising packages.
It also teaches you the importance of established processes. From training to marketing to customer service, a robust business model offers many processes for how to navigate different situations. Working through them as a franchisee helps you learn step-by-step what makes them effective.
A franchisee role puts true business ownership into perspective. It shows how much time, effort, and money you would actually need if you wanted to start from scratch. Thankfully, the franchisor reduces this burden with a toolbox full of resources.
You learn how to manage cash flow.
You wouldn't buy something without looking at the price tag. The same goes for joining a franchise. You should know all the costs upfront. These include the initial investment, along with the cost of inventory and working capital. Identifying these will help you get a better grasp on the total cost of business ownership.
By working as a franchisee, you notice the value of every service, decision and action. It conditions you to make smart decisions with your money. You learn how to identify and create your break-even point. You also understand how to manage your profits and losses. These experiences teach you how to allocate money to the most important areas of your business.
You learn how to manage money in a franchise so it doesn’t become one of your roadblocks to success.
You understand how to be versatile.
When you own a franchise, you wear many different hats. You bounce back and forth between employee and customer interactions. Then you jump right into building the business itself. You might even take some time to try out new marketing techniques. Many business owners believe this constant change is one of the most enjoyable parts of owning a business. What they don't tell you is that it also teaches you the importance of being a versatile business owner.
Franchise ownership is very hands-on for the first 18-24 months. But if you're driven by success, you'll get through the ups and downs in the early stages. You might have even higher highs and lower lows if your franchise is affected by seasonality. Being motivated during these fluctuations is crucial to your franchise success in the slow months. You can always turn to your franchisor if you need advice or a helping hand.
You're not only responsible for daily business operations, but you must also build the brand. It's also a great way to get creative with getting the brand into your local market. Guerilla marketing tactics, existing sales tools, and paid advertising can help accomplish this. You could also speak with other franchisees about their success stories to get ideas for your franchise.
Achieving this balance between conducting and promoting your business is essential. It's one of the surefire ways you can set your franchise up for success.
You get management experience.
It's tough to take on every business responsibility by yourself. That's why you have to hire the right people – as a franchisee, you should work on your business, not in it.
Franchisees learn how to hire effectively, often through trial and error. Look for self-starting employees dedicated to the company's mission. These are the people who won’t be confined by their role. They'll be the ones who will get creative and help you build the brand through different channels.
Also, look for new hires who are responsible. Franchisees often operate small teams, so they need to have employees who they can depend and lean on when necessary. They should help you carry the weight of the business so it's not resting solely on your shoulders.
You might think about hiring a manager or two to run day-to-day operations. But this could spell disaster for any franchisee. You remove yourself from your business when you do this. You can't see the problems inside your business, and communication also breaks down when you're not engaged. Your absence may give employees the impression that you don't care about the business. It's important that you come to understand the business before you even consider handing off full management responsibility to someone else.
You understand the importance of a good support system.
When you join as a franchise partner, you gain a whole new level of support. This comes in two forms: the franchisor and the network of fellow franchisees.
The franchisor will provide you with the tools and resources you’ll need to get set up. These will include:
- The business model
- Marketing and advertising tools and resources
- Ongoing support
- Previous business connections and relationships
This takes the grunt work out of building new processes and relationships from scratch.
You also have a network of fellow franchisees to communicate and collaborate with. They can help you solve problems, especially if they've solved them before. They can also help you understand more about timelines, like how long it will take to make a profit. Their advice will keep you from being blindsided. They’re also outlets for exploring new, creative ideas.
Franchising gives you a quality perspective on business ownership.
It’s not until you’re in the hot seat that you learn what it takes to be a successful business owner.
Whether you're new to the world of entrepreneurship or not, you’ll gain a ton of knowledge working as a franchise partner. You get the experience of being a business owner without having to tackle everything by yourself.
These experiences as a franchisee can't be bought with profits. They can only be earned through the hard work and dedication it takes to run a business. Only then can you understand the difficulties of being in business – in the end, it's worth every ounce of effort.