The franchise system is an interesting alternative for all those looking to get into entrepreneurship.
One of its most important features is that it allows us to work on a business model that already works; in fact, it will have been successfully tested in other places.
But this does not mean that success is guaranteed – far from it. Each franchise will have to overcome a series of challenges in order to achieve the objectives it has set for itself.
Challenges to be overcome by today’s franchises
1. Creating a strong project
A very common mistake is to think that a company that has been in business for some time will always be stronger than a business that has not been around for so long.
The fact that a franchise is strong is not so related to the novelty of the project as we might imagine.
Instead, it’s necessary to determine whether the project is strong. To do this, we will have to ensure that the definition of the model is optimal, that there is good advice from experts who have knowledge of the sector and/or that there are professionals with extensive experience who can help. A good example of this strength can be found in the Jeff franchise model, for example.
It’s imperative that there be a change of mentality within the franchise industry; until this is done, there will be major obstacles ahead to overcome.
2. Guaranteeing success
This is much easier said than done.
The franchisee must have one thing very clear: the fact of having a franchise neither guarantees success, nor eliminates 100% of the risk. Although, it’s true that it reduces it in a significant way.
It’s important to take into consideration that the company’s headquarters will offer comprehensive support to the franchisee in order to provide them with the maximum amount of information possible about the business. You’ll learn about the most common problems and some resolution techniques that can work. All this is done with the purpose of reducing risk as much as possible.
It’s important to avoid that mentality or belief that tells us that investing in a franchise is 100% safe and think about all the things that could go wrong.
3. Determining the sector in which you wish to invest
One of the main reasons an investor decides to enter the world of franchises is self-employment. They may have saved a certain amount of money and want to turn it into profit, they may be tired of having to listen to their boss, or they may simply want to have a business of their own, without facing the usual risks of conventional businesses.
A challenge that franchises bring us -in this sense- is to think about which sectors are the most suitable for self-employment, and which ones are not advisable. This choice will depend very much on the profile of the investor, as well as the interests of the person who will be in charge of the business.
It’s advisable to have training related to business administration, since the more information we have about it before getting into the business, the better.
4. Finding the franchise that best suits our needs
Another important challenge we cannot forget is finding the right franchise.
Most often, the entrepreneur is guided by their interests and preferences. This is not all bad, but we cannot forget other key details, such as our professional skills, the investment we are planning to make, as well as the responsibilities and obligations that each type of franchise entails.
With just a simple search on the internet, it’s possible to find a long list of franchises that can be very interesting to invest in. But before making the decision, we will have to read in detail about its characteristics, conditions, amount of money to invest, royalty payments and other expenses, as well as any other important details.
5. Finding a good location
One of the reasons why a franchise may work in one place and not in another is location. For example, in some places it’s possible to find some customs that could complicate the local business (especially gastronomic customs).
Keep in mind that the main purpose of a franchise is to fulfill a need, not to create one. If you anticipate that it’s not going to work in one location, the best thing to do is to change the location or choose a new franchise.