Buying a franchise can be an incredibly rewarding decision for the discerning prospect. For many, the idea of replicating an already successful brand can be enough to make them jump at any seemingly viable opportunity. Sure, you may not have to come up with the idea or business plan, but you do have to know a few things about making a success of running a franchise. Here are five common assumptions about franchising that every aspiring owner should be aware of.
Every franchise is a successful one
Thorough research is an upfront requirement if you’re to have any chance of success. This entails speaking to current franchisees, looking at a franchisor’s financial records, understanding franchisee closure rates, attending open days, meeting with management staff and reviewing customer sentiment amongst other things. Start with a list of requirements before holding any serious talks with potential suitors and seek the advice of an expert if you feel unsure about anything. The internet makes doing initial research fairly easy, so take a bit of time to get to know potential franchisors a little better before making any decisions.
The final decision lies with you
If needing the approval of a holding company doesn’t appeal to your idea of owning a business then you should reconsider your options. Franchisors are typically very strict about the operations, marketing, staffing and other important business practices they expect franchisees to implement. This means that you won’t be able to pivot your business or go on a rebranding mission any time soon. Decisions of this nature are left to the franchisor. The good news is that the guidelines set out by the franchisor are there to help you run your business effectively and generate the greatest amount of profit.
You have to stick to what you know
Many people assume that they shouldn’t veer out of their lanes when choosing a franchise. One of the benefits of owning a franchise is that you can rely on a trusted business model to turn a profit. In the UK, for example, a large percentage of tutoring franchises are owned by franchisees with no experience in the education sector. So if you’re thinking about leaving a career that you’ve lost your passion for then it doesn’t mean you have to choose franchise in the same field. So think about what you’d really love to spend your time doing and do the research to see if there is a franchise that speaks to your passion.
You’ve got your initial startup costs covered
It’s important to understand that even the biggest franchises in the world aren’t hugely successful right from the start. This is why every franchisee must have cash put aside to support the business during its fledgling stages. Franchisor fees and royalties apart, you’ll need to ensure that your staff, electricity, rent and your own salary is paid on time. In many cases, businesses don’t see a profit for up to 18 months, which makes startup capital coupled with a lean mentality two crucial factors to steering the ship during the seminal months. Speak to a financial advisor on your current startup capital situation and about ways to ensure your franchise survives the runway as it looks to gain traction.
There’s no room for growth
So you’ve beat the runway and business is good but why not make bottom lines even better? Research shows that 3 out of every 5 UK franchisees expand their operations to 2 or more outlets while one third venture across borders with their business. Replicating a franchise in a market you’ve identified should be a relatively easy task once you’ve mastered the formula. If you’re so inclined, consider expanding your business, reach and revenue by betting on a winner, namely, yourself.
Interested in running your own tutoring franchise?
The Boost Education franchise model is built on more than a decade’s expertise in quality and affordable tuition. With a growing number of tutoring centres across London, we’re looking to bring our unique approach to education to more children across the UK. This means we’re looking for people like you to join us in our mission to become the standard bearer in after school educational support. If you share our passion for education and helping young minds unfold to their highest potential, then talk to us about owning your very own Boost Education tutoring centre in your area. Or simply download your free info pack today and we’ll be in touch soon.