Making It Work: A Strategy To Sustain The Early Franchise Journey
You've done your research. You've narrowed the list or perhaps even selected the franchise brand that you'd like to team up with. You're comfortable with the brand's market presence and name recognition; you believe it matches your skill level, that it's well-suited for your lifestyle, and that it complements your personal business goals. Now it's time to map out your entrance strategy.
It's a good idea to have your finances in order before you approach the brand. As you've reviewed franchise documents you've determined the general amount of investment that will be required. You should have an idea what kind of franchise fees, investment requirements, and ongoing royalty fee structures you'll be expected to make.
If you're planning to use a nest egg (savings account, retirement account 401K, etc.) you'll want to make sure you have immediate access to those funds. If you're planning to borrow money from friends, associates, or family, you'll want to have meetings with those individuals to ensure firm commitments. Now's the time to let them know you're about to pull the trigger on your franchising career.
If a bank or other lender is part of your strategy, you'll also need to get this part of your financial portfolio in order. A bank is going to want to see a business plan from you and would probably like to know of any other business management success you have had. They'll want to talk about collateral and any personal guarantees you may or may not be required to give. And of course you'll discuss lines of credit and interest rates. These are important details that can't be underestimated in the process of obtaining adequate capital to get your franchise business off the ground.
It won't take long for you to recognize the importance of having your financial resources all lined up. That's going to be one of the first qualifying questions the franchisor is going to ask you. Get the green light here, clear a few more screening hurdles, and you'll be on the road to franchising.
You've been approved and the franchise contract has been signed. In the early days of your franchise start-up operation you will be busy…very busy. Many new franchisees like to have partners - because they can help with funding in the beginning and assist with operations once the unit is up and running. But whether you are flying solo or working with partners, you will need to outline how the business will be managed and products and services delivered daily. There are only 24 hours in a day and many new franchisees would quickly tell you that's not enough time. That's also why it's so very important to plan and carry out these strategies effectively and efficiently. Your business depends on it.
For example, you may be strong in marketing and your partner may have a better handle of the financials. Take control of the pre-opening marketing plans and the early advertising and promotional events. Let your partner handle crunching the numbers on the left and right side of the balance sheet. Each of you should concentrate on your strengths and let your partner do the same.
Depending on your franchise concept, you may need two employees or two dozen employees. You need to be able to interview, screen, and hire great people right off the bat. One of the challenges of retail franchising - especially food concepts - is hiring and retaining top employees and unit managers. These frontline people are critical to your early and ongoing success.
You'll also want to work closely with your vendors. These are partners that are going to be key allies from even before your franchise opens.
If you get the capital in place, and follow that up with a solid group of people at all levels, you're going to be off to a good start in your new franchise endeavor.