What Aspiring Franchise Owners Need To Know

What Aspiring Franchise Owners Need To Know
Armando Bartolome

Posted at Apr 27 2019  in ABS CBN News

I have led many seminars and workshops on franchising and noticed that more and more people have been attending.

It is good that many are looking at franchising as a sustainable means of living. And why not? There are many advantages to starting your own franchise business.

A franchise means you don’t start with an unknown brand. It also offers franchisees ownership, which is supported by the bigger franchise business. You also don’t need to have business experience to run a franchise since franchisors will train you to operate the business.

Owning a franchise business may cost less compared to starting your own business. Again, since the business is franchised, you don’t need to worry about the equipment and products as the franchisors will provide them to you.

A lot of franchises also have a good reputation and image along with proven management and work practices and ongoing support.

Franchise businesses also have a higher rate of success compared to start-ups.

But before you start your own franchise business, you should also be aware of several things.

You should understand what is written on the franchise contract. Normally, a franchising contract means having to go through a number of pages. It states what the franchise business is all about and how a franchisor should manage the business.

One of the mistakes that franchisees sometimes commit is using products that are not used or approved by the franchisor. A franchisee is expected to use only products approved by the franchisor to maintain quality.

Another common mistake is using a billboard or signboard that is different from what the franchisor and other franchisees are using. This ruins the branding of the franchise.

The people that work for a business is of course, very important. Therefore, you need to ensure that you bring the right people on board. It is important that the people that work for a business to have a full understanding of how the business works. This is the reason why franchisors provide training, to ensure that the employees are fully aware of their responsibilities.

Bear in mind too that although you have a franchised business, you still need to secure your own business permit. The business permit that the franchisor has is only good for his own.

Like in any kind of business, you must also ensure proper documentation of everyday sales. This is not just to help you realize how much you are selling in a day but more importantly, to determine if all the “ins and outs” of your products are balanced. Sometimes, there are employees who commit fraud and report selling less than what was actually sold.

In the franchise agreement, a franchisee is also given option should he wish to terminate the relationship. You, as a franchisor should be able to weigh which option suits you best.

It is unlikely that every franchisor would offer to take over the franchise business, therefore, it may leave you the option to sell the franchise to another individual. But also remember, that if you wish it to sell to another individual, you should also inform the franchisor about it.

Being in a franchise business may allow you the independence to run a small business with the help of the franchisor. However, it is the right of every franchisor to know every step that you plan to do. This way, you will avoid having legal battles in the future.

The biggest problem that any franchisee may encounter is the lack of support from a franchisor.

A franchisee may need support to market and set the price for products. Since the contract states that the franchisee should stick to the kind of products to be used and should offer their services at the same rate, sometimes the price may not be competitive at a certain location.

Being unhappy with the business that you started may make you think twice if you should continue or throw in the towel.

However, one thing that you should not forget – being an entrepreneur means you need to face a lot of risks. It is up to you if you will allow yourself to be defeated or take it as a challenge and aspire to become a better entrepreneur.