Conducting businesses with a great franchise can be very tempting, especially for those who are inexperienced but looking for having their stores. Franchisors can provide massive advantages over building up from scratch. However, underlying risk cannot be ignored, and here are six mistakes you could make when considering joining a franchise.
1. Failing to engage the franchisor’s support
As a franchisee, the best support you can get when starting a franchise is from the franchise company itself. They have rich experience in opening up stores in various locations and different condition. The success in launching the business can be achieved more securely.
Even after the store is opened for a while, remember the franchisor is always there to help you. An example is XIMIVOGUE constant supports on both hardware and soft skills onsite training. On one side, they are supporting their brands when engaging with their investors; on the other hand, you as the franchisee can gain much more experience and learning opportunities from their ongoing business engagement.
2. Choosing only those brands you love
Being able to engage in brands you love could be one of the best things ever happened, but do not ignore other brands or industry with future potentials. Keep an objective eye in assessing all the choices and make sure your final decision can provide a viable income stream to you. A niche market may not be your best choice emotionally, but some can bring considerable returns. Make sure every penny counts in your investment, especially if the capital available to you is not excessive.
3. Deviating from the franchise continuity
Once you decided to go with a franchise, you also devote yourself to build their own brands. Therefore, it will be less flexible in altering the strategy on your behalf. Adopting the existing process that franchisors have established is the very first action you should take. Furthermore, ensuring any property provides the same experience is also the primary goal of a franchise.
While you are learning their management and business structure, opportunities may present, and you can share your own thoughts about improving the firm’s operation. For example, XIMIVOGUE usually has a manager dispatched from the headquarters to the local store for better communication and engagement, and franchisees can talk to them in enhancing the overall experience. However, keep in mind that the franchisor always leads the way.
4. Failing to access the right financial sources
Financing your dream is not as simple as it looks. Many entrepreneurs do not realise the importance of timing in acquiring financial resources. If you do not start the process and reaching for right source earlier, it is less likely that those terms will be in your favour. Moreover, the earlier you start, the more options can be shown to you in addition to a bank loan.
5. Relying too much on your franchisor
Although franchise support has regularly been mentioned and you should definitely pay attention to those sources to expand your business, never entirely depend on them. A franchisor could have over a thousand stores to manage, and your requirement may not be heard until their primary operation is finished. While it’s great to receive support from time to time, a franchisee needs to learn new approaches in continuous adaptation and customer acquisition.
Additionally, do not slow down your marketing efforts and do not settle for complacency. Your store may be building up fast due to the brand reputation and influence, but they will not last long if you are doing nothing. Through analysing your local market by using tools like SWOT and PESTLE, as well as conducting market research, you can make informed decisions. The franchisor can support building up the brand nationally or globally, but franchisees need to take action actively and progressively to attract local consumers.
6. Not planning an exit strategy
People may wonder why they should think about exiting when they join the franchise. Honestly, Franchise is like any other businesses; having a backup plan is vital in case things do not go as you like. If you do not adequately prepare for failing, more money can be lost after you close up, for instance, the costs of terminating a lease too early as well as the suck costs for all equipment and machines. Once again, there will never be too prepared in this battlefield.
Final view regarding franchise
Buying a franchise does not mean the total elimination of risk. Learning from as many sources as you can reduce those concerns to the lowest level possible. The easiest way to approach those sources is investing in a massive franchise with an excellent franchisee caring and supporting system, such as XIMIVOGUE. Financially speaking, fast growth rate, international expansion, and positive investors and consumers feedback will allow you to clarify if your choice is optimised. Lastly, remember to research and have a plan for everything.