Becoming a franchisee
As a franchisee, you operate your own business but you do so under the watchful eye and with the guidance and support of the franchisor. Should you make a mistake, the franchisor will be quick to point it out to you and help you to get back on the right track. How does this actually work and why would a franchisor want to do it?
The franchisor's role
The franchisor, as the grantor of the franchise, must have operated a successful business for a reasonable period. Before launching the franchise, the franchisor will have developed a product that is in demand and registered a brand. In addition, the systems and procedures needed to operate the business profitably will have been optimised and documented. So, why do companies franchise?
One thing is for certain; philanthropy is not the reason. Every sustainable franchise creates win/win situations for its participants. Working with franchisees speeds up the process of business expansion because franchisees are usually highly motivated. After all, they invest their own capital and get to keep all the profits.
The franchisee's role
The franchisee is the individual who invests in a franchise; it could be you. If so, you would be responsible for funding the set-up costs and expected to manage the business hands-on. The franchisee's role is summed up in the slogan, “to be in business for yourself but not by yourself”.
Although no franchise is fail-proof, experience has shown that it is far less common for a franchise to fail than an independent business. There are various reasons for this, with the following standing out:
- No matter how much money you have, no serious franchisor will accept you as a franchisee unless you appear to have what it takes to succeed.
- Once you are part of the network, the franchisor will help you to find a suitable site and assist with lease negotiations.
- Some franchisors offer a “turn-key solution”. This means that their staff oversees the fitting out of the business and gets it ready to trade. Others will put you in touch with preferred suppliers and help you with the drafting of specifications and quality control.
- The franchisor will train you in all facets of operating the business. In appropriate circumstances, the franchisor will also assist with staff recruitment and training.
- A franchisor representative will be at your side during the period leading up to and beyond the grand opening. This goes a long way towards ensuring that everything works smoothly.
- On an ongoing basis, the franchisor will work with you to agree on realistic performance targets, undertake store audits and generally render assistance that will maximise the success of your business.
- Periodic regional and national meetings allow you to meet fellow franchisees, keep in touch with developments in the sector and offer you a platform from which to propose new ideas and discuss potential problems.
