While it is an easier way to start a franchise business as there would be less stressful than creating your brand. Still, there is no exemption for franchisees from going through several obstacles. One needs to face some challenges and find solutions to keep the business running smoothly.
Choosing a franchise business does not equate to immediate success. Selecting a franchise business means you have the opportunity to start a business with an already recognized brand with tried and tested methods. The franchisor may have prepared everything for you to begin your franchise business. However, just like any new business, launching a new franchise means the need to put a lot of work into it, as well. Hence, every franchisee should expect these bumps and prepare how to provide a solution for each.
- Difficulty in getting the business off the ground. First, you must ask yourself if you are ready to start a business. You should know that the company you choose is something you can commit to 100%. You should not be overwhelmed with the tremendous tasks of being a new entrepreneur. Since you can always seek the help of your family and be able to hire employees. Similarly, you are not left alone to start the business as a franchisee. The franchisor will provide the training needed and other resources to help you in your day-to-day management to ensure that the company runs smoothly.
- Lesser decision-power capabilities. As the franchise owner, you may seem to have some things in mind that you think can help improve sales and how the store looks. However, you cannot just decide and make these happen instantly. The franchisor has the upper hand on everything, mainly that there should be uniformity across all franchisees’ stores/shops. You can suggest and let the franchisor think about it. If feasible, they may allow it and probably inform the other franchisees to adopt the same idea in their stores/shops. Similarly, in a restaurant franchise business, you cannot use an alternative ingredient that may affect the taste of your food. If you are low in stock with some elements, consider ordering way ahead of time. Otherwise, inform your customers that particular food on the menu is unavailable in the meantime.
- Lesser brand control. There may be instances when a particular branch of a franchise business undergoes some challenging situation that could hurt the entire brand’s reputation. You know you are doing the best you can; however, it can affect all the branches of the business when a vast issue arises. A slip-up can affect the entire franchise network. Although you can be affected personally by these instances, you should maintain the quality of service. You provide and assure your customers that it is not your store involved in such situations. Your customers can attest to that for as long as you set a high standard in providing the service your customers rightfully deserve.
- High employee turnover. A highly-recognized brand would also mean increasing the demand for each employee’s output. Employees may be too overwhelmed with their work that some opt to look for another company. The best that a franchisee should do is to carefully choose the employees to hire by looking into the skills of each employee with total commitment. Also, it would be beneficial if franchise owners could provide a retention program in which employees would be more encouraged to do their best at all times. Provide the necessary training and motivate employees by ensuring complete comprehension of their tasks. When employees are aware of the value of their work, they likely remain loyal to the company. Hence, job satisfaction will rise.
- Market saturation. You may have noticed that some known brands are present almost anywhere. Suppose you have a target brand in mind. In that case, you should conduct a feasibility study to ensure that the brand of your choice is not familiar in the area where you want to build your business. The success of such brands may not be what is happening to other companies. However, you should know that you can be more successful if you fill in your brand choice in a good location. It means that it is not enough to choose the brand to carry. But most importantly, the site should be ideal enough that people would support it. You would not want to put your business just a street away from the same company offering the same products and services since this would only divide each branch’s sales. Strategically choose a location where you think your business can rise and enjoy success for as long as possible.
Evaluate your local marketplace with these three:
- Suitability of the business model in area
- Competitors
- The overall customer base for the products/services
Owning a franchise is a huge commitment. Yes, it has risks, but it can save you a lot from the capital and work in creating a new business compared to starting your own business.
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You may contact Armando “Butz” Bartolome for questions and more information.
By email: aob@gmb.ph
FB Page: Armando Bartolome
Linkedin: https://www.linkedin.com/in/franguru/
Website: https://www.gmb.ph
