What Determines Success in a Franchise Business?
Everyone considering the purchase of a franchise, regardless of brand or industry, thinks about whether or not they will be successful. What is it that separates franchisees who succeed from those who do not? It’s actually pretty simple.
The Opportunity + The Franchisee = Level of Success
Different industries grow at different rates over time. However, one thing remains consistently true among franchise brands. The opportunity any one franchise brand provides to prospective franchise owners is basically the same, prospective franchisee to prospective franchisee.
With franchise brands, the opportunity is clearly identified up front and exposed even more through validation with other franchisees. Franchisees of a brand have access to the same amount of support, the same systems, the same tools, and even the same pool of franchisee peers.
The determining factor of franchisee success is how the opportunity aligns with the prospective franchisee. Everyone is different, we all know that. In franchising, YOU determine your level of success. That’s what makes it such a great business model. It is also why it is so critical that the discovery and evaluation process is mutual.
Are you willing to put in the time and effort to grow your business?
Building a successful business takes time. Are you prepared to make that investment of your time, up front, to grow your franchise? The amount of time it takes to get a business stable and in a place where you can start to pull away and be less hands on in day-to-day operation varies widely by franchise brand. Be sure that you are honest with yourself. If you hear through validation that it takes four years, believe the franchisees. If you are not willing to make that commitment, reconsider the opportunity.
Are you equipped to handle the primary challenges of the business model?
Every franchise opportunity has operational hurdles. Do you know what those hurdles are and how they match up to your personal strengths? If the business model has a high emphasis on direct sales and community relations and you prefer being behind a desk in an office, it might not be the opportunity for you. Make sure you are aware of and well-equipped to handle the main hurdles of the business model, or reconsider the opportunity.
Are you keeping your eye on the prize?
Don’t be blinded by the industry. What are you trying to accomplish by opening a franchise? It is critical that the opportunity match up with your personal goals, and that might mean considering an industry or franchise brand that you never expected. Yes, opening a franchise in the pet industry will bring short-term satisfaction because you love dogs. But, make sure in your financial forecasts, your long-term goals are met as well. If you can’t achieve the personal goals that motivated you to look at franchising in the first place, reconsider the opportunity.
At the end of the day, franchising is a great model because it eliminates risk and provides systems for success. Think about all these things as you evaluate your options and you’ll be well positioned to succeed.