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From malls, suburbs, and even parking lots, franchises are littered throughout every corner of the globe. Huge corporations like Mcdonald’s, Taco Bell, and Century 21 have millions of franchises opening each year, and each of them earns no less than a million dollars each year.
Whether you’re an unsatisfied corporate worker or a visionary trying to raise capital for your next business, setting up a franchise is a great way to build a secondary income. However, investing in a franchise is no walk in the park. Owning a franchise requires money, and the capital investment depends on the franchisor in question. Moreover, the more affordable a franchise is, the more time needs to be put in for the setup and day-to-day operations.
Information and Experience Spree
Millions have lost their life savings after juggling a franchise without prior knowledge and experience. Before diving straight in, you need to go on an information and experience spree.
Read as many blogs and books about running a franchise. I strongly recommend starting with ‘Become a Franchise Owner: The StartUp Guide to Lowering Risk, Making Money and Owning What you Do’ by Joel Libava. Up your game and know the rules beforehand.
Get on-call with at least two franchise owners. For doing this, you either need to have two franchise owners already on your radar, or you need to go and search for them. Put your networking skills to the test; talk to people, find connections and get your franchisees.
If you’re below 20, I strongly recommend working for your desired franchisor for at least a few months. You’ll learn, gain experience, and know the ins and out of running a franchise. Remember, there is nothing better than experience!
Reading the Manuals
Every franchise works under the franchisor, and each franchise not only needs to provide the same service but is also required to look, feel and sometimes even smell the same. Such factors create as much similarity as complexity. To eliminate confusion and satisfy interests, franchisors produce manuals, which include rules and step-by-step guides for operational purposes. Therefore, you, as a franchisee, need to address the manuals before diving straight into the business.
Furthermore, the manuals may be in the form of emails, booklets, letters, and pamphlets. And skimming is not an option! Attention to detail is key, and the manual part of the equation is equally burdensome to every franchise. In fact, the bigger the franchisor, the bigger the manuals, as they tend to maintain transparency in partnerships.
Your franchise manual may include more of:
- Detail-driven maintenance operations: Every franchise, (especially fast food) requires a tremendous amount of maintenance. Ignoring maintenance agreements and claims before accepting may prove detrimental to your franchise. Furthermore, maintenance isn’t generalized for the entire franchise; each machine and stock have their own maintenance requirements.
- Finances and labor: Just like the other features, the finances also have to align according to the interest of the franchisor, mainly because of legal matters. For absorbing this information, you may require prior experience in accounting. Labour management and training also make up for a sizable chunk of content.
- Customer service: Customer service and satisfaction are vital for your franchise’s growth and existence alike. Even hundreds of words fail to stress the importance of customer service.
“Retailers with high customer satisfaction are often underestimated, [and they] have better earnings than most people expect, including their own management.” – Jon Bird, Forbes
- Additional details: This chunk of information entails the clothing requirements, opening and closing requirements, ordering raw material/stock, updating menus, technological requirements, and ethics.
Expanding the Workforce
The sole purpose of setting up a franchise is earning passive income. And to make this investment truly passive, you need the assistance of at least two professionals; a lawyer and an accountant.
The lawyer will decipher the legal documents and may be handy with potential lawsuits. Secondly, an accountant will crunch the numbers and report flaws, which can help expose thieves and dishonest workers.
Manage Your Time Effectively
There’s an excruciating amount of detail that needs to be paid attention to according to the manuals. However, in the first year, all you have to do is focus on your priorities! Minutemanpressfranchise.com says that:
“You should work with your team and do all the things you need to address today’s workflow but pay attention to the bigger picture. Attend to those important tasks and develop the presence of mind to know when to proceed to the next item if something is taking more time than expected. To avoid bottlenecks, if there is an item on your list taking an inordinate amount of time, move on to the next item and address / reassess later.”