Any business comes with risk attached, but franchising is quite different in many respects. First, it’s based on a system that has already been proven to work well right out of the box. With an established franchisor at your back, you can avoid stepping on many of the mines that are strewn in front of your journey. That doesn’t eliminate all risk, however. Many franchise owners weren’t prepared for a few common bumps in the road, and they were forced to close up shop. Here’s how you can avoid their mistakes when starting your franchise.
Don’t Let Inexperience Destroy You
Those who opt to enter the franchising business are probably savvy enough in how to run a company. However, that’s not always the case. In many instances, greenhorns will be more than happy to take the plunge, and many have made a success out of it. Restaurant franchising is an entirely different kind of business, and requires a different mindset. Those who get into restauranting sometimes find themselves ill-prepared for the complexities. The key here is to be able to adapt swiftly and efficiently in order to learn how to correct mistakes and refine operations. You don’t need to be Warren Buffett to understand how to run a franchise – you simply need to be flexible and proactive in mind.
Keep Track Of The Pennies And The Dollars
As a restaurant franchisee, your eye needs to be on the expense sheet at all times. This doesn’t mean you’ll be in danger of losing everything if you take your eye off the ball for a brief moment, but it does mean that complacency allows risks to creep in under your nose while you’re not looking. Make sure to keep a solid eye on the money going out, versus the money going in. This should be a no-brainer, but many first-time franchisees are more concerned with the day-to-day operations of running a location, and that can spell trouble early on. When things settle down into a lucrative rhythm, you can relax your stance a bit, but with upfront costs being such a huge factor at the start, you can’t afford to get complacent. Bear in mind last-minute expenses, whether to buy new equipment, and unexpected construction delays which can all play a factor.
Don’t Skimp On Marketing
The phrase “if you build it, they will come” has rarely rung true throughout the centuries, and that’s the case for brick and mortar businesses as much as it is for YouTube channels. Restaurant franchisees enjoy an extra-special benefit here, as marketing is primarily handled by head office. That’s a golden arrow in the quiver that can be used to jumpstart your franchise location right out of the gate. However, that doesn’t mean the buck stops with the franchisor. You’ll need to do some legwork when it comes to local advertising, SEO and digital marketing campaigns that guarantee exposure. After all, if you just opened a brand new franchise location, you’re going to want to invite everyone over to celebrate and spread the word. Oftentimes franchise owners believe the franchisor will take care of everything, or the strength of the brand will carry them through on easy sails. Those who rely on this line of thinking could be in for a rude awakening.
Location Is Key
Your franchise could circle the globe ten times over in terms of popularity, but nobody is going to care if your chosen location isn’t up to par. This is one of the biggest pitfalls many franchise owners face when first starting out. Lack of foot traffic and visibility will cause incredible problems when it comes to steady table-turning. Similarly, a lack of parking can be a total killer. Make sure to pick a location that is in a prime spot with lots of potential for attention, otherwise you won’t last long. Thankfully, franchisors have just as much incentive for your spot to succeed as you do, and they’re probably not going to work with you unless the location is prime. When in doubt, consult them for advice on how to move forward. Remember, this is a partnership!
Bad Service Shuts Doors
Your franchisor can run parallel with you every step of the way, but at the end of the day, they can’t be there to keep track of how your location runs. If your customer service is poor, your location will fail. It’s as simple and straightforward as that. By the time your franchisor runs the numbers with you and spots a problem, it may already be too late. The key to good service starts with the franchise owner, and it’s up to you to set the standards of excellent service that will help propel your location to stardom. Mistakes will be made, but how you handle those mistakes will speak volumes to your customers. Unhappy customers should be dealt with respectfully and diplomatically, while unruly and combative customers should be shown the door before they infect your entire location with a bad vibe. Keeping a smile on your face throughout any ordeal won’t be lost on your customer base. They appreciate you being human. Don’t try to be perfect – just strive for the best service you can give.
In reality, many of these issues can be addressed with a little common sense and due diligence, but they can slowly creep in if you’re not careful. If you have read this article and recognize your ability to keep these potential risks at bay, then you’re more than ready to consider becoming a franchise owner! This rewarding and lucrative career path is limitless, and all it takes is your ability to keep an eye on things to make sure that your platinum-quality standards remain consistent. For more information on how to get started, contact us right now!
