The steps to take towards building a franchise require time, money, and a great deal of sweat equity. Once the decision is made to expand from one location to several, the hard work begins in building a business. As with any enterprise, challenges exist, many unique to franchising and even more that are unexpected.
The need for working capital
Name recognition and a positive reputation is not enough to grow a budding enterprise. Working capital is paramount, particularly in the initial years of the franchise. Day-to-day operations will provide the best education. The initial years involve a learning curve that will require money to get through the growing pains and generate the revenue necessary for business operations. Combined with a sound work ethic and an equally solid financial foundation will help.
Don’t go at it alone
This is no time to micro-manage. Identify strengths. Assess weaknesses. That starts with hiring staff with experience in this particular area of business. Hard-working and loyal employees establish a strong foundation that can secure the future of your franchise. Ensuring that everyone is on the same page with shared goals will also foster confidence with franchisees.
Overcoming misconceptions of potential franchisees presents obstacles. Once the entrepreneur signs on, that suspicion may not end. Doubts lead to distractions and impede the growth of a franchise. The best course of action is the highest level of transparency. Building franchisee confidence starts with open lines of communication and immediate troubleshooting and resolution of problems that may arise.
Adjustment to ownership
Having the title of “franchisor” is one thing. The daily operations of a business are only as effective as your leadership skills. Particularly in the early days of operation, you need to be a strong motivator to inspire employees and franchisees that believe in the company’s goals and, specifically, you. Also, as mentioned previously, letting others do their jobs unimpeded can allow you the time needed to visit your franchisees and make strong connections.
*NOTICE: This blog is intended solely for informational purposes and should not be construed as providing legal advice. Please feel free to contact us with any questions you may have regarding this blog post.