A successful franchise venture requires the right leadership behind the business and at the helm of the franchisor. There are many aspects to franchise development that in some ways seem obvious and are possibly more tangible in nature such as systems, technology, processes and franchise marketing systems, but what is lost on many entrepreneurs is the responsibilities that fall on their shoulders as this transition from an operator and “doer” to a franchisor and “teacher” happens.
Generally, these types of qualities and traits can be determined prior to franchising in order to save time, money and heartache for all involved. The importance of true self evaluation is required to make this determination as an entrepreneur considering the franchise expansion model.
For one, franchising requires intense levels of patience and the ability to coach people who haven’t had experience as business owners. Some entrepreneurs have a difficult time working with people they may see as being weak or inept and are unable to see things from the new franchise owners perspective. If a business owner’s skill set lacks patience and the willingness to mentor people, franchising may be the wrong path to take the business.
Next, franchising requires a certain degree of selflessness. Great franchisors are continuously looking for ways to help, support and drive profit to franchisees. Poorly performing franchisors cut corners, look for ways to gouge and have a singular mindset for their own gain. These are the franchise systems you read about where lawsuits take place and franchise brands fall apart quickly with poor management decisions driven by greed and short-sightedness.
Additionally, when you franchise a business, the returns are not short-term. Franchise development is an effective way to build a brand quickly and grow the company into new markets rapidly. Unfortunately, franchising is not very profitable for the first 1-3 years of growth due to the nature of the business and needing to reinvest in the business model, marketing and infrastructure needed to support the growth. Entrepreneurs considering franchising who either need or are driven by short term cash flow are most likely better off finding alternative growth channels.
Then, a good franchisor is someone who has a strategic mindset and has vision for where the brand and business model will go. Vision is not a trait that can be taught, you either have it or you don’t and as the leader of a franchise network, you should be able to create energy around your ideas, have new strategies that are relevant and an unending commitment to your brand and what it stands for. These are reasons why franchisees not only invest in a system, but continue to invest and believe in their commitment to a franchise. If you lack the leadership and ability to convey your vision’s opportunity and how it will benefit others, franchising will be a short-lived venture with frustrating results.
Do your due diligence and understand whether you are a match for the franchise growth system.