Are you planning on starting a business? Then one option you need to consider is buying a franchise. You can take advantage of a tried-and-tested business model that you can easily replicate. This means that even if you have no experience starting and running a business just yet, you can succeed, thanks to your franchisor’s support.
While buying a franchise offers many perks, there are a couple of challenges that you are likely to face before you can experience success. Before you take the plunge and start your journey of becoming a franchisee, learn how to address the following challenges first:
Investing in a franchise comes with risks
It is true that any business comes with risks. But when it comes to a franchise, you need to be careful when choosing your franchisor. It pays to do your research and dig a little deeper so that you can find a franchisor you can trust. Make sure that you have already tested their offers, talked to a few of their franchisees, and done your homework on the Internet. This way, if, for instance, some cleaning service franchise opportunities come knocking on your door and you are interested, you can mitigate risks by trusting the right brand.
Insufficient capital
You may already have the funds to buy a franchise. But are you financially ready for the other expenses that come with it? Underestimating the fees that come with growing your business can take a toll on your finances. Make sure that you already have access to sufficient capital not only to support your expansion but also to finance on-going expenses and any unexpected costs.
Poor location choice
Just because you plan on buying one of the most recognized brands there is does not mean that you hit the jackpot. Take note that brand dilution exists, and it happens when one fails to check the potential market share. When too many of the same franchise is already in a single location, it can affect your sales negatively. What you can do is to find a strategic location for your business to make sure that there is still room for your franchise in your target location.
High employee turnover rate
When it comes to business, one challenge you can face is a high employee turnover rate. This refers to the high percentage of employees leaving the company for another job opportunity. If you have a high employee turnover rate, you’ll need to spend more time and money hiring and training your workers. What you can do is to improve your recruitment and retention strategy. Find the right people to train and keep them happy.
Poor work-life balance
Buying a franchise and quitting your 9-to-5 job do not guarantee that you can now enjoy work-life balance. Remember that your new business venture requires your time, dedication, and effort. While you may choose a manager to oversee most of the operation, you still need to keep an eye on your franchise to make sure that everything is in order. If work-life balance is what you crave, then you’re better off choosing a seasonal or home-based franchise.
These are among the common challenges every franchisee will encounter. If you plan on buying a franchise or already own one, know that you are not alone. Many others are struggling to address some of the listed issues. Don’t forget that you can also rely on your franchisor for help if you need assistance.
