What to Avoid When Opening a Franchise

Opening a new franchise is an exciting moment in any entrepreneur’s life. Oftentimes, it’s the culmination of a lifelong dream. Suddenly, you’ve got your very own business, built upon the foundation of a thriving and popular brand. This excitement is certainly warranted, as franchises provide very real opportunities. With that being said, there are pitfalls that franchise owners need to watch out for. A few big mistakes in the early stages can doom an enterprise. Avoid these common errors, and you might be looking at decades of profits.

 

Failure To Secure Sufficient Financing

 

Launching a franchise with inadequate funding is like setting out on a three-week trip with only a single set of clothes. Sooner or later, you’re going to find yourself in a difficult situation. Some folks make the fatal mistake of thinking they only need the money necessary for start-up costs, and that their earnings will cover them from there. In reality, you should finance both the launch and the first year of operations. Businesses are tough to get off the ground, and you shouldn’t count on major earnings during the first twelve months.

 

Wasting of Franchisor Support

 

One of the major advantages of owning a franchise instead of a stand alone business is that franchisors offer considerable logistical and strategic support. To forego this assistance is like coming empty handed to an open book exam. The franchisors have years of experience about best practices, and know the business better than any newcomer. Forget about any notions of foolish pride, and gladly accept as much help as they’ll give you.

 

Lack of Adequate Research

 

Successful franchise owners only enter the business after months or years of due diligence. If you rush into an opportunity without researching the market, you’re likely to regret your decision. Simply being a fan of a particular brand is not a good enough reason to seek your own franchise. You need to think long and hard about your chances of success in the location you’re considering. Also, don’t forget to analyze your own strengths and weaknesses. If a particular business doesn’t match your personality, it’s best to give it a pass.

 

Ignoring the Benefits of the System

 

When it comes to operating your franchise, there’s no need to reinvent the wheel. Franchisors have spent years (and often decades) perfecting their system, using their resources and scope of operations to their advantage. You don’t have to ignore your own instincts altogether, but, in general, it’s best to adhere to the system in place. If you get too clever for your own good, you might find your franchise doing worse than its cousins in other locations.

 

Overlooking The Importance Of Marketing

 

Some franchise owners assume that, since they’ve joined themselves to an already-successful brand, the marketing will take care of itself. In reality, it’s incumbent on owners to pull their own marketing weight. Even if the brand itself has name recognition, you still need to attract customers to your particular location. If you skimp on marketing, your franchise might fail to live up to its full potential.

 

Failing To Stay Humble

 

Arrogance and pride have led many franchise owners to ruin. Whenever you sign on with a brand, it’s important to remember than you are latching onto a program that has already proven successful. If you wanted to do it your own way, you should have started a separate business to start with. By humbly accepting best practices that have been proven successful elsewhere, you set yourself up for long term success.

 

Owning a franchise is a great way to enter difficult industries with organizational support. Rather than doing everything yourself, you have an existing brand and proven methods to lean on. By staying focused and avoiding the mistakes listed above, you can make the most of this excellent opportunity.