What Makes the Perfect Franchise Marriage?
I meet with a lot of franchisees. Some happily married to their franchisor and some who are disgruntled divorcees. It makes me wonder… “What makes the perfect franchise marriage?”
Franchisees buy into a franchise system, a system that is proven. A system that has support mechanisms built into it to help them along the way. So why is it that some people earn a respectable living and some don’t?
Why is it that some franchisees feel they need to separate from their franchisor because they are worn out and feel they have no time, little money and a clueless team? Why is it though that other franchisees seem blissfully happy and go on to buy more franchise businesses?
One common factor I have found amongst the divorced franchisee is that they failed to do extensive due diligence before signing the dotted line – perhaps they should have lived together first. If they had lived together they would have worked through the big issues before signing the franchise agreement.
So since you cannot live with your franchisor beforehand, what can you do to be sure that your relationship will be a good one?
There are three things in my experience that make a franchise marriage work:
- First, before entering the agreement the franchisee must ask themselves can I be a franchisee, can I take instruction, follow systems and processes can I be part of this union.
- Second they take a good hard look at the Franchisor, their future partner to see if they can be in a relationship. Do you share common values and visions? Do they have any previous disgruntled partners? Are you both united in selling the same product or service?
- And finally you both go looking for your first home – oops business site – the business that you will be entering together. Where will you live, who will your neighbours be? Will people visit you there? Can you afford it? Can you build a profitable life together?
There are so many things to consider when buying a franchised business. Usually everyone is in a hurry. The franchisor has a growth time line to meet, the franchise broker can smell the commission and the prospective franchisee has been sold the sizzle and cannot wait to get started – a bit like the beginning of any relationship really.
BUT if you can take one thing away from reading this article it is this – Loose your excitement head, and don’t get married on the first date. Take your time to consider this move carefully. You are going to be in this relationship for a long time, the length of the agreement regardless of whether the relationship is working or not.
It is buyer beware when buying a franchise so the onus is on you to do all the research to confirm that the sizzle that is being sold to you is actually correct. Take the time to live together first if possible, have an experience day in-store, speak with other franchisees in the system. This all takes time.
Successful franchise marriages all have three things in common:
- Franchisees entered their system fully informed.
- They considered many opportunities before they found the one they were comfortable with. The one that was a fit for them.
- They entered the system knowing what Key Performance Indicators (KPI’s) they had to meet from day one to enjoy success in their franchised business.
Remember, buying into a franchise is a huge financial commitment, you can never ask too many questions. You wouldn’t enter a marriage without seeking advice from those who know what it is like to be married; therefore you shouldn’t buy a franchise without speaking with a franchisee mentor, someone with YOUR interests at heart.
“The opinions expressed by Smallville Contributors are their own, not those of www.smallville.com.au"
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