Going Into Franchising with No Operational Partners
There are many different ways to approach the day-to-day operations of a franchise unit. Some people prefer to have operational partners and divvy up responsibilities. This might make sense when you have two or three people who each possess different skill sets. Perhaps one is better with organization and accounting, another more adept at marketing and customer relations, and so forth. It can be a good management tool but it's not for everyone. Remember it means profits are divided among the partners. Besides, some entrepreneurs like to have their hands on all aspects of operations and maintain a more centralized control.
Operational partnerships are not always as promising as they may seem at first glance. Unfortunately, conflict can and often does arise with operational partners. For example, sometimes work habits and ethics do not match. Partners can quickly become at odds with each other over the amount of time and effort each is putting into the franchise – especially when profits are being evenly distributed among the partners. If you go into a franchise business with a good friend or family relation you could also be setting yourself up for disappointment. Personal and professional relationships are two distinctly different things and the stress of beginning a new franchise business can damage personal relationships.
But if franchising is the business vehicle you choose and you want to "be the boss," here are 7 things you should consider:
1. You're in charge and calling all the shots. All the employees and unit managers are going to be looking to you for direction and operational enforcement. This means you'll need to be available and probably spend a significant amount of time in the store.
2. As the sole owner/operator, you are ultimately responsible for all operational issues (think employee hiring/firing, etc.) and the overall profitability and sustainability of the unit.
3. Be prepared to work long hours (80-hour weeks) to get the unit off the ground. Face it, you're going to spend lots of time in the store in the early days. As the operator, you're in charge and you're going to have to make this thing work all by yourself.
4. Any issues with regards to accounting, payables, receivables, and even dealing with vendors is going to rest squarely with you. It's your job to oversee cash flow and expenses. As the boss, you set the rules and the policies and procedures. It's your job to track financials and keep an eye on the shop.
5. All contact with the franchisor is going to be through you. It's your job to stay up-to-date on systems and policy changes and make sure all paperwork and financial data is properly managed and submitted. You need to work to keep this relationship healthy and amicable. The franchisor is one of your best resources.
6. Once the unit is up and running, you can begin to back away some from the day-to-day activities. It's not going to require 80-hour weeks forever. Now you can schedule activities outside of work and enjoy more flexibility in your schedule. You may even be doing well enough to hire a manager to oversee things for you. Perhaps you even consider opening additional locations.
7. All profitability and what to do with those funds is your responsibility.
Going into a franchise as an individual owner/operator is a tall order but if you have the skill set, discipline, and desire you can enjoy the power and reap the rewards.