Along with hard work, being a success in franchising is about making the right choices.
First of all, you must make the judgment as to whether franchising is right for you at all.
Nicky Mowat, CEO of beauty franchise Beauty Calls, says franchising is immensely rewarding, but warns would-be franchisees to be under no illusions about the effort involved.
“Franchising is hard work and you get out what you put in,” she says. “If you’re looking to buy a franchise and expecting an easy ride – don’t do it, because that’s not going to happen.
“It’s your business so you have to treat it as any small business and go for it. If you’re frustrated and thinking, ‘I want more work and to do something more exciting’, then this is great, because it gives you flexibility and financial stability.”
You also have to make a choice about which of the franchises for sale to go with. No amount of hard work will rescue you if you buy into a declining brand with network-wide falling sales.
Sandra Neto, a franchisee for domestic cleaning franchise Living Clean says research is of paramount importance if you’re to reach the right decision.
“You really have to make sure that you can trust what you’ve been told” about a given company, she advises. “Sometimes you can have a gut feeling that you’re with the right company, with the right person. But you should always do the market research anyway, just to confirm that this is true.”
John Warren, Driver Hire franchise development director, outlines the ways in which the franchising experience can go sour for franchisees.
“Franchising is not a guaranteed road to riches and requires just as much hard work, determination, self-motivation and commitment on your part as with any start-up.
“Occasionally there are failures, and in my experience they are usually due to one of three things.
“People can mismanage their finances. Although we provide support and guidance, ultimately franchisees are responsible for handling their own finances, including cash flow management.
“It is extremely important, especially in the developmental stages of a business, that expenditure is closely monitored and that adequate provision is made for VAT and PAYE payments.
“Also, it is vital to have adequate credit vetting systems in place to safeguard against bad debts. One large bad debt can lead to the downfall of a business.
Successful franchisees can lose focus, become complacent, expecting future success as of right. If a personal ‘comfort zone’ is reached then desire to grow the business may recede, which will almost inevitably lead to decline.
“It may also be triggered by personal circumstances which impinge upon the business. And franchisees can lose focus when their commitment and attention is diluted by other business interests.”
“A third problem is when systems are not followed. The whole point of investing in a franchise is to acquire a proven business system. A franchisee that tries to reinvent the wheel is wasting his time and money and is unlikely to succeed.”