Would you buy a house before seeing it first? Or a car without a test drive?
Buying into a Franchise is a big investment. Not only in terms of money but also your time, so it makes sense to do your research. Don’t you agree?
It may come as a surprise, but some people make the plunge into the business and franchise sector without covering all bases. We’re here to make sure you don’t make that same mistake!
Lack of research inevitably ends in failure and comes as a big expense to both Franchisor and Franchisee. In this article you’ll find the top mistakes to avoid when buying into a Franchise!
Mistake #1: Expecting More Support
The first mistake is a very common one amongst new franchisees – expecting too much support from your franchisor!
We understand that it can be quite daunting becoming a business owner but expecting too much support will not only hinder your growth as a franchisee but also might mean you’re not ready and independent enough to take this step.
The best way to avoid this first mistake is to do lots of research in the run up to signing the franchise paperwork and make sure you are familiar with the setup this specific business has. Another tip would be to speak to existing franchisees and seek advice from them on how to be connected to the business but stay independent and in control of your own franchise at the same time. From speaking to people who have been through the same experience you can learn from their mistakes and come to your own conclusion if this career path is the right one for you.
Mistake #2: Failing to Plan…
Another common but bizarre mistake people make when starting up a franchise is lack of planning. For example, plan your finances and a solid business plan/model to run by and research the industry you’re buying into. In your everyday life you wouldn’t live beyond your means or buy something that you simply couldn’t afford, so why do the same in business?
Completely understanding the finances and costs that surround your business plan is very important not only for the initial start-up costs but to keep it running to the standard that’s required. This often happens when working capital is not factored into the forecasts.
Here at Award Leisure, our cash flow forecasts are tried, tested and proven to be accurate year after year. Not only do our franchisees meet the forecasted figures but they exceed them! This is due to a partnership of their own ambition and hard work mixed with Award Leisure’s business model. We also allocate a realistic figure for working capital as we understand the importance this consumes.
Mistake #3: What’s a Franchise?
The final mistake to avoid is to understand that it’s a Franchise. Sounds simple doesn’t it? Many ambitious business owners are often very strong willed, creative and target orientated – which is not the best personality for running a franchise. What I mean by this is that although you are in control of your business and you are the everyday decision maker, you are still part of a franchise – meaning you are contracted to follow the business model.
Many franchisees see this as a positive because they like the support offered and enjoy following the proven systems and processes. However, for some business owners this can pose as an issue. My advice to avoid this imaginary brick wall would be to communicate with your franchisor before signing up about what is expected of you at different stages of your franchise journey. By doing this, you are preparing yourself and you know exactly what to expect.
These may seem obvious mistakes to make, but they are more common than you might think. If you follow the above advice and communicate with your potential franchisor, you can be sure to steer clear of these hazards.
We are proud of our training and support program for all new franchisees, ensuring that our new franchisees are fully prepared and ready to take on our exciting adventure. Want more information? Take a look at our free brochure or get in touch with us to book your own Discovery Day!