At Astreem, we meet people from all walks of life seeking business opportunities either to start a new career, become one’s own boss, flexible work hours or just simply a change of lifestyle. With so many franchise opportunities out there, how do you know which franchise works for you? How do you, as a brand new franchisee, know what type of franchise suits best for your investment quantums, previous experience, future earning expectations as well lifestyle choices?
Franchise offering aside, some fundamental questions to ask yourself are: 1) What do you love to do? 2) What Skills and experience do you have? 3) What are you willing to risk, and possibly lose? 4) What are you willing to sacrifice to make your new venture succeed? 5) How much can you make? 6) Do you like the franchisor? ——————————————————————————————————
1) Do what you love. Once you choose a franchise, be prepared to make an all-out commitment to its success, including long hours and sleepless nights. That’s where passion comes in. Granted, starting your own franchise business is about making money, but given a choice, where would you rather spend your time: doing something you love, or slogging it out day after day at just-another job?
2) What is the nature of skills gained in your past experience? Your skills and experience are a key factor in determining the best brand for you. Are you a hands-on person, a doer? Or are you a manager who prefers to delegate? Do you like to work alone or with others as part of a team? Are you prepared to be a leader, telling others what to do and making all the major decisions every day? Can you handle the responsibility of meeting a payroll, of having others depend on you each week so they can pay their bills?
3) Consider the Risks and the Potentials. For the most part, many first time franchisees invest a large part of the life savings in to a franchise. As such, failure is not an option. Yet, time and time again, franchisees who take on new opportunities do not budget sufficiently to give them sufficient breathing space to build their franchises from the time they are fledgling business units to the time the outlet is able to offer them healthy returns on their investment. A healthy rule of thumb is to ensure the franchisee budgets an additional 6month worth of budgeted cash-flow.
Being prepared offers 2 things, a prepared mind and offers the franchisees planned resources to handle any unforeseen issues that may crop up in the course of managing a business.
4) What are you willing to sacrifice to be a successful franchisee? With every industry, a different set of requirements come into play. There are no right or wrong answers. Only what works for you. If you like people and want a simple product, a retail franchise may work. If you want weekends and evenings for your family or yourself, consider a business-to-business brand, so you can work closer to 5 days a week instead of 7 day weeks. If you want to be directly engaged with end consumers, believe that there is nothing like the daily demands of satisfying food cravings, then a F&B franchise that engages you 24/7 may be just for you.
These are trade-offs that sometimes are required to fulfill the higher calling to to be your own boss. Ask yourself if your desire to be independent drives them is sufficient to carry you through doubt and fear.
5) How much can you make? This often depends on the nature of the franchise you select, however, a large part of it also depends on how much you are willing and able to invest. I also determines whether you need to invest in a single unit franchise, Multiple unit or even and area or a master franchise for a given territory.
So how much are you able–and willing–to spend (and risk) to own the franchise can range from as little as $50,000 to about $500,000 for single unit franchises and often more than 200k for area or master franchise rights to ensure there is sufficient capital to finance the operational set up the franchise needs. For most first-time franchisees, the investment quantum required and know how necessary of an area franchise may be out of reach. To start your journey as a franchisee, it is advisable to get your feet wet fist by way of a single unit franchise, making your way towards multiple unit franchise ownership.
As a Franchisee, you pay for the right to use the franchisor’s brand name and more importantly, its operating system. Most franchisees feel that at the end of the day, they pay a price to buy the rights to be a part of a brand and a logo. The royalty they pay is about the know how and sales it can bring them.
6) Do you like the Franchisor? Finally, if you are going to be signing a 5 or 10 year franchise agreement, whether for a single or multiple unit, area or master franchisor make sure you like the people you are going to work with. Ensure that your vision and goals are aligned with your prospective Franchisors. Make sure that they have proper operating systems you can work with to ensure your success.
About Astreem Astreem Consulting Pte Ltd is a business consultancy firm, established on the 31st of August 2005, dedicated to building Strong Franchise Organisations by providing quality business solutions in Franchise Development, Business Matching, and Franchise Systems Management.