The 3 Secrets to Franchise Success
Learn how to invest your IRA or 401k into a franchise penalty-free. ($50k min)
As more and more people decide to seriously look into the idea of becoming franchisees, one of the key questions they ask is "What can I do to prepare myself, to get as ready as possible, to become a successful franchisee?" The good news is, there's a lot you can do to make this a wonderful experience. Here are the three secrets to franchise success:
1. Before you even look into a single franchise opportunity, you need to prepare. This process starts by knowing yourself and having a clear understanding of who you are and what you want to get out of a franchise. You should start with a thoughtful and thorough self-examination process that asks questions such as:
- What do you like to do in a work environment, and what don't you like? What aspects of business have given you the most success and enjoyment in the past? How do you feel about managing employees? What hours do you like to work? What are the general characteristics of the perfect working role for you?
- How do you feel about risk? How much capital are you willing to invest in a franchise? How much debt are you willing to incur above your initial cash investment? How long can you operate without an income from your franchise and still sleep well at night?
- What are your goals for owning a franchise? What do you hope to accomplish in your life through this venture? How will your life be different in a few years if you have a successful franchise business?
Once you have completed this self-examination, you should have a clear idea of not only the general parameters you want in a franchisee role, but even more important, you'll know what you want to accomplish long term. This knowledge is vital to picking the right franchise rather than getting sold on something that doesn't really match up with your goals.
2. Narrow down opportunities. Start looking at opportunities through the lens of the work you have already done. In the most objective manner possible, compare what you learn about the franchise opportunities you're investigating with your answers to the questions above, and ask yourself, "Does this opportunity look like what I decided I wanted for myself-not just partially, but completely?"
If the answer is no, have the discipline to move on to some other opportunity. There are plenty to choose from, so don't compromise on what's important to you. Sooner or later, you'll find one that matches your talents and goals, so keep looking. If the answer to this question is yes, then you're ready to move on to the next step.
3. Trust but verify. You've taken the time to know what you want and to determine that a specific opportunity can provide you with what you're looking for. Now it's time for you to go into overdrive in verifying that your conclusion is, in fact, correct.
There are a number of key steps you should take in this verification process, including:
- Calling Existing Franchisees. You may have already talked to a few franchisees to get a general feeling for the business. Now's the time to get very specific. Pick a few who seem cooperative and lay out your specific plans and expectations. Say something like, "Here's what I'm good at, here's what I want to do, here's what I want to accomplish-is this franchise going to be able to deliver these exact things to me?" Ask them what significant challenges they foresee for you. Keep making these calls until you are sure you've got what you're looking for.
- Shadowing a Franchisee. Ask one or more existing franchisees if you can shadow them in their daily routine. You don't have to do this for months or years, but a few days spent in this kind of activity can give you a whole new perspective on the franchise. On a variation of this theme, you can also ask to work in an existing unit as an employee for a few days to get a feel of the operations of the business.
- Getting Real with the Franchisor. Discuss your specific plans with the franchisor, especially operational support employees and executives of the company. They will appreciate the forethought you've given to what you want to accomplish and will usually be frank with you in return. Even though you might have a wonderful relationship with the salesperson you're dealing with, keep in mind that that's not the person we're looking for input from at this verification point in the process.
At this point, you've completed all three of the secrets to preparing yourself for success as a franchisee. You're ready to make a great decision. It's time to move forward with the assurance that you've done all you can to prepare yourself for a wonderful experience.