Running Your Business Like a Franchise: Tips and Tricks
Running your own business can be an overwhelming task if you’ve never done it before. The challenges of running a successful franchise aren’t any easier, but with proper planning and management, you can have the best of both worlds! Here are some tips and tricks to consider while managing your business like a franchise.
What is a Franchise?
A franchise is an agreement that allows a business to operate under the guidance of an existing company. The franchisor, also known as the parent company, provides its customers with a name that they trust and other assets such as branding, marketing materials, retail space design, etc. In return for this support, the franchisor makes money by taking royalties or other fees from franchise owners.
The franchises that have been around for the longest time are often companies like McDonald's or Starbucks where franchisees are given strict guidelines about what products to offer on their menu boards. These franchises have succeeded because their business systems are so well-established.
The Advantages of Franchising
Franchising is a great option for many entrepreneurs because it offers several benefits. Most notably, the franchisor will provide you with training and support in order to help you get your business off the ground. Plus, franchising provides you with an established brand that already has an existing customer base. If you're looking for some additional help when starting your business, franchising might be the way to go! Before I dive into the various options available, I want to note that there are three main types of franchises--
- master franchiseeships (a single location),
- regional franchises (several locations),
- and multi-unit franchises (multiple locations).
It's important to choose wisely because this decision can have major implications on your growth potential as well as any future expansions.
For instance, if you want to start a fast food chain like McDonald's or Wendy's then a master franchisee might not be the best choice. On the other hand, if you want to start something like Jiffy Lube or Geico Insurance then a master franchisee would probably make more sense. Of course every business is different so always do what works best for you!
How to Run Your Business Like a Franchise
Start-up costs are minimized because the franchisor provides everything you need to get started. They also provide training, ongoing support, and tools that make day-to-day operations easier. You can take advantage of economies of scale so you don't have to worry about things like buying in bulk or hiring staff as your business grows. Lastly, there's a lot less risk involved with franchising because the franchisor will share their knowledge with you. If it doesn't work out for any reason, they've done all the groundwork so you can walk away without feeling bad about it.
The Benefits of Running Your Business Like a Franchise
A business system is the framework that holds your company together. A well-designed system can help you get to where you want to be faster, smoother, with less work. It will also make it easier for you to delegate tasks so that you have time for what matters most. As an entrepreneur, it's easy to get caught up in the day-to-day of running your business without realizing what's happening around you or how your decisions will affect the future of your company. When we operate as a franchise, we are able to execute our systems more efficiently than if we did everything ourselves because we're able to use our knowledge of best practices from other franchises.
The Disadvantages of Franchising
Franchising is not for everyone. It can be expensive, time-consuming, and difficult to find the right franchise to invest in. The challenges of franchising include finding the right franchise, working with a franchise broker, paying franchise fees, training staff properly, complying with franchise requirements, handling employee issues (i.e. wage disputes), and monitoring the day-to-day operations of your franchisees.
A potential upside? You may earn income on other people's franchises as well as yours - when they produce profits.
Continuation (six+ sentences): You also have access to their business practices, infrastructure, processes, marketing strategies and established customer base if you're a master franchisor.
Continuation (six+ sentences): From our point of view as entrepreneurs running our own businesses - we see ourselves as owning our own franchises rather than being slaves to them.
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