Becoming a franchisee can be a dream come true. It’s an opportunity for you to become a business owner. Plus, you’re joining a supporting business family while helping the expansion of a beloved brand. What’s not to love? That said, as a business owner, there are many mistakes and missteps you can make along the way, but never fear; we’re here to point out a few mistakes new franchisees might run into along their way to success.
Here is our list of mistakes new franchisees make and a way you can avoid them all.
Failing to Do Enough Research
When entrepreneurs are eager to start their franchising career, they fail to do enough research before purchasing the franchise of their dreams. You need to ensure that the franchise is a good fit for you, meets your values, and matches your interests. Franchise agreements typically lock business owners in a contract for 5 to 10 years, so if you purchase a franchise, you want to ensure it’s something you’re happy with. Another aspect of doing research that new franchisees overlook is taking the time to review the franchisor’s business model, its history, and the extent of its support. Knowing these details can make or break your success.
Trying to Do Too Much Too Soon
Owning a new franchise business is exciting. You’re bursting with ideas and tons of energy, and you’re ready to do incredible things with your business. However, when you come into an already established company, it’s easy to get caught up in what other franchisees are doing and how they appear light years ahead of you. This might lead you to try and take on too much way too soon. You have to be able to walk before you can run! It is a mistake that new franchisees often make. The key to building a successful business is first to master the business essentials within your own franchise before you start focusing on bigger things.
Underestimating How Much Money You’ll Need
The next mistake new franchisees make is underestimating just how much running a franchise can cost you, especially in your first year. Owning a franchise isn’t only purchasing the business and then opening the doors; there’s much more that goes into having a healthy franchise location. Before signing the business agreement, your franchisor should walk you through all of the upfront costs and forecasted costs you might encounter. They should also ensure that you have sufficient capital available to cover your business’ initial launch and each growth stage before turning a profit. If you’re not careful, you can deplete your stash before your business even takes off.
Not Accepting Franchisor Support
There’s a reason why many entrepreneurs opt for a career in franchising versus starting their own business from scratch; it’s the unparalleled long-term support that franchisors and fellow franchisees offer, from helping with funding to providing marketing and tips and tricks of the trade. There are some, though, who don’t want to use the resources their head office provides. This is another common mistake new franchisees make. The support your franchise family offers is invaluable and can serve as a much-needed morale boost when you’re riding the roller coaster that is your first year. And we understand, your reasons may vary, but if it’s because you want to do it on your own, it can be harmful to your business not to seek help.
Underestimating the Time and Dedication Needed
One of the most appealing things about franchising is the opportunity to be your own boss. The mistake new franchisees make is underestimating just how much work you have to do before this becomes possible. When you buy a franchise, it becomes your responsibility to get the business up and running. This includes overseeing construction, purchasing equipment, hiring the staff, and monitoring the day-to-day operations until you’re able to hire a general manager to take over. That means a lot of long nights and time away from loved ones or your favorite things. Only after your business is running like a well-oiled machine can you take a step back and create your own schedule and open up the possibility of being a multi-unit franchise owner.
Hundred Acre Consulting
Although we only named a few, there are many mistakes that new franchisees can make when it comes to owning a franchise. The most relieving part is that many of these mistakes are avoidable. And you’re in luck; one of your best resources is our team at Hundred Acre Consulting. Not only can we help you find the perfect franchise, but we can also provide consulting throughout your storied career as a franchisee.
If you’re interested in working together or learning more about our services, contact us today!