One of the most common misconceptions of new franchisees is that
they expect to make a profit from the first day of opening their
This misguided notion sometimes persists despite the clearest
caution from franchisors and other advisors. That said, clearly the
goal for both the franchisor and the franchisee is to turn the
franchise location into a profitable one.
Here are some important matters to assist in pursuing that
- Know your numbers inside out. This includes
the initial financial information received from the franchisor, the
pro forma financials prepared by your accountant, and the financial
performance of your franchise from commencement onward. Put the
initial financial information you receive through stress testing.
For example, consider changes to labour costs, what if minimum
wages increase? If you purchased an existing location, what is the
likely impact of having to replace certain plant and equipment in
the short term. More obviously, consider the outcome of
increased/decreased sales. This sort of consistent and
continued analysis from the outset and throughout the life of your
franchise will greatly assist you in adapting your business to make
a profit and to keep it growing.
- Culture and employees are key. To succeed
there is no doubt that you need to put time into building the right
culture and cultivating the right individuals for the right roles.
It cannot be emphasized too much, that putting time into
training, inspiring and developing your staff will pay big
dividends down the road (literally)! The environment of
your franchise (from customer service to the interactions in the
back of the house) must be created and maintained thoughtfully and
intentionally. How you treat your employees (and how they treat
each other) is likely to influence on how they treat their role and
the customers. Provide genuine recognition and praise, and correct
them respectfully. Give them opportunity to excel and provide room
for growth and promotion.
- Don't go it alone. One of the fundamental
aspects of a successful franchise system is that it is based on a
proven model, that has succeeded in the past and will succeed in
the future. Without doubt, there are variables and nuances to
your franchise and its location, but, as far as conducting the
business is concerned, you have a wealth of experience and
knowledge to back you up. Quality Franchisors have a vested
interest and are keen to assist you in formulating business plans,
marketing plans and to support you generally. Use those
plans as a map to your success, modify them as required, but stick
to them. Also look for online franchisee forums where you can learn
or ask questions from other franchisees on their methods,
challenges and discoveries. Call or even visit some of the other
franchisees in your area or beyond. Don't ignore the vast
resources available to you in operating your
Learn more about the featured franchise opportunities in your area.