Keys to Franchising Success
Make sure you have enough money.
- Determine how much you must invest, how much you're willing to risk and how much you will need to live on for at least 12 months.
- Make sure you understand the initial investment required.
- Make a careful and rational decision about buying the franchise. Listen to your attorney and accountant and do not be pressured by the franchise salesperson.
Follow the system.
- Franchisees often get their business up and running and then begin to change, add or modify existing products, advertising, hours, services, and even the quality and consistency they are licensed to deliver. This violates the franchise agreement and puts you in jeopardy of having your franchise terminated!
- By following the system, you:
- preserve the brand
- protect your investment and that of your fellow franchisees
Don't neglect your family and friends.
- Be prepared to work long hours, but also make sure to budget time for your family and friends.
- Don't forget to acknowledge the sacrifices your family makes.
- Allow your family and friends to share in your new life.
Be an enthusiastic franchisee.
- The success of any business is linked to the level of enthusiasm you bring to the job.
- Enthusiasm brings a level of excitement and energy to the operation that everyone can feel-including your customers and staff.
- Let your staff in on the fun. Acknowledge their good work with recognition or a raise.
Recruit the best and treat them with respect.
- Good help is hard to find-great help is essential.
- To keep the good staff you've hired:
- Rotate routine and boring jobs.
- Be fair. Don't show favoritism.
- Work with your staff to develop the schedule.
- Treat your employees with respect. Don't allow employees to be disrespectful to any other employee.
- Keep employees informed of new marketing and other promotions.
- Remove hassles-ask employees which procedures are working, and which aren't.
- Make their workdays challenging.
- Provide timely performance reviews and wage salary increases.
Teach your employees.
- In franchising, training should be continuous. Employees are your front line.
- Training classes are a good way to show your employees that they matter to you.
- Get all the training you can from the franchisor.
- Regularly train and retrain all your employees.
- Hold refresher and advanced classes on a regular basis.
- Alert your franchisor when you need additional training.
- Take advantage of every training opportunity, whether it's offered by the franchisor or by local schools, trade associations and other sources.
Give customers great service.
- The most important thing you can do is to get everyone to smile!
- Let the customer know you're happy they chose your business.
Get involved with the community. Customers like to shop in places that support them.
- Sponsor a Little League team
- Support a civic or youth group
- Give tours of your business for school groups
- Set up a kiosk at community events
Stay in touch with your franchisor and other franchisees:
- Stay in communication with the franchisor: Letters, newsletters, emails, phone calls, faxes, training classes, regional meetings, conferences and conventions.
- Communicate with other franchisees by participating in the franchise owners’ association.
Watch the details.
- Success is in the pennies! If you watch your pennies, the dollars will take care of themselves.
- Minimize costs and maximize sales.
- Watch out for shrinkage (merchandise that is missing or unaccounted for).
- Work hard every day. Choose your time away from the franchise wisely.
Source: “What are the Keys to Franchise Success?” International Franchise Association, accessed February 3, 2017, http://www.franchise.org/what-are-the-keys-to-franchise-success.
Unlike the voluminous statistics available to characterize the relative success of entrepreneurs, there have been an insufficient number of authoritative studies to substantiate the success rates of franchises. That said, the American Association of Franchisees and Dealers (https://www.aafd.org/) was established to promote fair and equitable franchising and dealer practices. Their point of view on this topic would act as a counter-balance to those that might claim incredibly high success rates of franchises.