FranNet Asia president Lim Soo Kong discusses things to avoid after buying a franchise business.
SO you actually did it! Congratulations! If you’ve chosen wisely, you may well be on the road to financial and personal independence.
You’ve turned the corner from being reliant on a corporate paycheck to self-reliance, true freedom and independence.
Here’s a list of eight things to avoid after you’ve bought a franchise business.
Don't be the franchisor: If there's one thing that constantly amazes me it is the magical process that occurs for some franchisees the moment they sign their franchise agreement. These franchisees seem to think that they know things that took the franchisors years to learn. Don’t do that to yourself!
Over time, you will have insights that are of value to the franchisor, but not at the beginning. Stay focused on the tasks that confront you, and try not to be swept up in the trap of thinking you’re the franchisor. Don’t try to create systems, and don’t try to fix all the existing ones.
Don’t try to be an expert on site selection: There is an old cliché about the three most important things you need to succeed in the retail business...location, location, and location. You've heard it a million times. It's true. When you buy a franchise that is “site sensitive”, the acquisition of a good site is critical to your ultimate success.
Be involved in the site selection process. There are certain things that you will know about your local market that may not show up on a franchisor’s site selection criteria. Try to find a site that both you and your franchisor feel will be a good one.
Don’t try to save money by scrimping on opening advertising and marketing campaign: One thing that you can count on is that as you are building your business, you become acutely aware of all of the costs that you pay to get your business launched.
As such, steel yourself and do the things that are considered necessary to start your business successfully. One expense that franchisees often seem to be tempted to “save money on” is marketing and advertising.
That is precisely the wrong thing to do! It's not enough to put up a sign and hope that people will find you. Holding back on marketing and advertising could cause business failure.
Don’t let it happen to you. Advertise and promote your business!
Don’t try to be know-it-all: Be willing to be a sponge, even if you are extremely bright and talented.
Also, be receptive to input. Be someone that the franchisor looks forward to talk to. Franchisors are subject to the same emotions as anyone else, and if you make it difficult for them to work with you, they will not be inclined to go the extra mile to help you.
Don’t selectively implement systems: One of the most remarkable, and true stories that I have ever heard in franchising came from a franchisee, who after suffering through an unsuccessful start-up, finally came up with a formula to make his business successful.
He told me that he had “tried everything else, and nothing had worked, so (he) finally decided to do what the franchisor had told him!” Do yourself a favour, and don’t selectively implement the systems that a franchisor gives you.
Use them all. Once your business is successful, and you know its intricacies inside and out, you may have changes to suggest. However, at the beginning, use the franchisor’s “cookbook”, and follow each recipe as closely as you can.
Don’t be hands off: I know that one of the great appeals that franchising has is that it can be duplicated and replicated, and that eventually an owner can back away, or even run their business as an absentee owner.
However, as a rule, you should be prepared to be very hands-on at the beginning, and should expect to work as hard, or harder, than you have ever worked in your entire business life!
You want to make sure that you implement all of the franchisor's systems, and that you train your employees carefully. Until you do, you cannot and should not back away from the hands-on approach to running your franchise. Get in there and see how every job feels.
Don’t be in too much of a hurry to make money: Do it right! There is always a temptation to build quickly instead of well. Don’t do that to yourself! If your business is one that requires a lot of foundation building or networking for its best long-term performance, take the time, and build your business in a way that will make it most successful in the long haul.
Don’t ignore other franchisees: This is one of the most bewildering mistakes that franchisees make. Sometimes, either because of pride or professional issues, new franchisees fail to take advantage of the knowledge and experience of the other franchisees. If you can learn from these franchisees, find out what is working best, and what to avoid. You can be miles ahead of the game. Learn about what does work, and how to do it.
There is one caveat to this: In every business, some people will do better than others. Listen to the leaders. Do what they do.
Of course, there are other things you should also consider. This list may be a good starting place for you, but whatever you do, take advantage of all the help you can get.
Did you find this article insightful?