Keys to Successful Franchise Business
The popular view among people is that franchise business is pretty much a cake walk, provided that you’ve enough capital support with you. But this is just half-truth, while the other half tells that there is lot more sweat and blood involved in this business than you can ever imagine.
Below we’ve jolted some of the factsheets about what it really takes to succeed in the world franchise business. Several of these factors are universal in nature and is applicable to other businesses as well
Sound Relationship Between Franchisor and Franchisee:
This factor is without a doubt the cornerstone for achieving long lasting success in franchise business. After all, without a sound and transparent relationship between franchisor and franchisee, achieving success in this business becomes near impossible.
The first important step is that franchisor ought to be completely honest in laying terms and conditions to his/her potential franchisee. Subsequently, franchisee owner must be diligent in expressing his willingness and unwillingness to implement these terms & conditions.
Apart from this, mutual trust and understanding is also as much needed, which is actually pre-requisite for achieving success in any personal as well as professional relationship.
Franchisor must be Wholeheartedly Helpful:
A franchisor must not leave any stone unturned in offering thorough and 360 degree help to his/her franchisee teams. A franchisor must actually set the ball rolling even before receiving the franchisee fees. This most certainly helps in infusing serious passion in franchisee owner to achieve success in the business.
Not to mention the franchisor must be even more generous in offering guidance when the business actually goes on floor. Giving proper guidance in product and service development, giving on-floor training to staff, offering comprehensive support during promotion and marketing. Besides, franchisor needs to completely standby franchise owner if the business begins to slide, or goes through rough patch.
Keeping your Team Ready:
Try imagining how disastrous it would be if your team is not even half-ready after you’re business goes on floor. Needless to say, it will turn out to be a big turn-off for your customers and you’re business is most likely to slide within first few months itself.
To prevent this, franchisor and franchisee must harmoniously work together to ensure that all staff members get a fool proof training. The training is especially more critical if the business is involved in fast food or restaurant business, where any laxity by catering staff is completely frowned upon by customers.
Allowing franchisee enough freedom:
A franchisee is obviously bonded by several terms and conditions imposed by the franchisor. However, franchisor must ensure that these terms and conditions don’t end up in imprisoning the entrepreneurial spirit of the franchisee owners.
In other words, franchisee owner must be allowed great degree of freedom to implement his/her personal creativity in day-to-day operation of the business. On the other hand, franchisee owner must work hard to fully capitalize on the freedom granted by franchisor.
Franchisee Must have Enough Working Capital:
Even if the product is an established brand, Franchisee owner will typically need 4 to 5 months to achieve a break even. During those critical 4 to 5 months, a sufficient working capital plays an important role to keep the business afloat.
Franchisee owner needs even more working capital, if the product is newly arrived or when the competition is too unforgiving.