10 Things You Should Know Before Becoming a Franchise Owner
For those who dream of being their own boss, a franchise can be the answer. However, there’s a lot you need to know before you dive in. To make sure you’re as prepared as possible to succeed, we gathered 10 things you should know before becoming a franchise owner.
1. You’ll need a good amount of capital to get started.
Investing in a franchise isn’t cheap, but a well-operated franchise can be extremely profitable in the long run. Once all of your upfront costs are covered, you’ll need money for operating expenses while the business gets established. There may also be monthly or annual franchise fees, which are often in place to cover national advertising or other costs. Make sure you know all of the costs beforehand, so you don’t run into any unexpected expenses later on.
Take some time to look at how much you’ve saved and decide whether to pursue a small business loan. Once you know how much you can afford, you can look at which franchises are available in your price range.
2. A franchise, like any other business, takes a lot of time and attention.
Chances are, you won’t be able to run a franchise as a side business. Most franchises require a significant amount of work to become a success. You’ll need to have the focus and drive that will carry you through long working hours.
3. You should follow your skill set, not your passions.
While the conventional wisdom is that you should follow your passions, franchise consultant Joel Libava recommends that you follow your skill set instead. By focusing on the character traits and skills that you bring to the table, you make it much easier for you to find success.
For instance, people with a background in accounting and taxes could seek a franchise opportunity in tax preparation. Someone with an outgoing personality and skills as a hairstylist or cosmetologist would find Primp and Blow a great fit.
4. Buying a franchise is a multi-stage process.
You won’t be able to Google a business Monday, pick one you like, and open your doors on the following Friday. It’s important to compare many different franchise setups to find the one that fits your area’s demographics, your personal tolerance for risk, your finances, and your aptitudes. Each franchise agreement is set up differently. Research a variety of franchising opportunities to see which is the most equitable and beneficial for you.
After initial research, you’ll need to attend a discovery meeting, where you and representatives from the franchise headquarters sit down and decide whether you and the franchise are a good fit. Be prepared to invest a significant amount of time choosing your business and getting started. In the end, you’ll agree that it was time well spent.
5. There’s a lot to cover in the Uniform Franchise Offering Circular (UFOC).
The Uniform Franchise Offering Circular (UFOC) is a document that sets out the relationship between the franchiser and franchisee. Every franchise will offer one, as it’s required by the Federal Trade Commission (FTC). This is a long and detailed document that contains many requirements for both parties.
The UFOC is binding. Because there is a lot of complex legal terminology in it, it’s a good idea to have a lawyer look it over to make sure you understand and are comfortable with everything that’s inside.
6. Franchises offer less risk than other businesses, but they are not risk-free.
One of the top benefits of investing in a franchise is its less risky than starting a small, independent business from scratch. Nonetheless, there are still risks involved in starting any business. One that thrives under one person’s management in a specific area may not work as well with a different owner and a different audience.
Be honest with yourself about your risk tolerance, and have a business plan in place to deal with any hiccups you encounter along the way.
7. Research the history and success of the franchise you are interested in.
While some franchises are launched after the success of a handful of small, individual locations, others are franchised immediately.
Consider the history of the business by answering questions such as:
- How long has the franchise been in business?
- How well has the company done from year to year?
- Is the business well known in your area?
- Who are their top competitors?
A franchise with a multiyear track record and supportive culture for franchisees is one that is more likely to be successful. Primp and Blow makes learning about the company easily accessible on their website.
8. There are training resources to help you get off the ground.
No franchiser would expect you to jump right in and know how to run an outlet of their business on day one. There’s a lot of training available to help you get started. Take advantage of the training and support offered by your franchiser. Other franchisees who have been successful with their stores can pass along a great deal of wisdom about what works and what doesn’t.
9. Franchises require a certain amount of conformity.
There are certain qualities that make a McDonald’s, a McDonald’s, or a Jiffy Lube, a Jiffy Lube. While you do own your own business, you also need to be willing to go along with the carefully built branding and practices that distinguish your franchise from others. Many practices and offerings will be a required part of the job. Make sure you’re comfortable with this and understand what they are before you jump in.
10. You need to have your own business plan.
In addition to using resources provided by your franchiser, you should develop your own business plan as well. There are a number of free templates online to get you started, like these ones from SCORE.
Your personal business plan can help you get a better handle on what you need to do to launch your business and succeed. It can also be invaluable if you’re applying for financing. Many franchisers like to see these plans, as it shows that you have given the idea of franchising careful consideration and are well-prepared to run your own business.
It takes a great deal of time, preparation, and research to make good decisions about opening a franchise business—but the pay-off is worth it. By doing your due diligence in advance and walking in with the knowledge you need, you can choose the franchise that is a perfect fit for you!
Primp and Blow offers amazing franchising opportunities for those looking for a signature blow dry bar franchise experience that’s unique from other hair salon and blow dry businesses. Contact us today by filling out our “Get Started” form on the Primp and Blow franchise page.