Becoming a franchisee is an exciting and stimulating adventure for anyone with the ambition of being their own boss. However, success as a franchisee is not achieved simply by signing a franchise contract.
L’Express Franchise gives you the key steps to follow to maximize your chances of success as a franchisee.
Understanding how franchising works
It’s essential for franchisees to understand how franchising works. But what is franchising? Franchising is an entrepreneurial model in which a franchisor – the owner of a brand – authorizes an independent entrepreneur – the franchisee – to use its concept and know-how in exchange for financial compensation. The franchisee must comply with the brand’s quality standards and commit to offering a service and/or products that meet the expectations of customers and the franchisor. However, there are different contracts. Commission-affiliation, concession, brand license or lease management: be sure to find out all you need to know about these contracts. It’s important that you grasp every dissimilarity and similarity in the contracts.
What’s more, the organization of a franchise is not the same as that of a non-network business. The relationship with the franchisor is a key element in your adventure. The franchisor is an essential partner for the franchisee, who must be able to communicate effectively with him to discuss his needs and concerns. Find out what support the franchisor provides for new franchisees. Initial and/or ongoing training, communication kit, premises: these are all points you need to know before committing yourself.
Find the right sector and brand for you
The sector and the brand are equally important factors for success in franchising. To begin with, the sector in which your future franchise will operate must be of interest to you. There’s no point in embarking on an adventure in a field that doesn’t appeal to you in the slightest; you’ll be running to your own ruin. You should also check that the brand you want to start a business with is in line with your values and objectives. It’s important that you know exactly what you want from your job. Ask yourself the right questions. For example, if you don’t want to work on weekends and public holidays, you can cross out catering and hospitality from your choices.
So don’t hesitate to meet franchisees already in business. They can give you feedback on their experience, their relationship with the franchisor, their level of satisfaction, as well as any difficulties they may have encountered.
To do this, get hold of the DIP – Document d’Information Précontractuel. Careful reading of this document will help you avoid mistakes and better understand the challenges of the franchise you wish to join. The purpose of the DIP is to provide you with all the information you need before making your decision. It contains information about the franchise, the franchisor, the market, the franchisee network, and the franchisee’s obligations and rights. This document in no way commits you to the franchisor. On the other hand, from the moment you sign the franchise agreement, you are committed to opening a franchise.
Financing and budgeting
One of the most common mistakes franchisees make when starting out in business is miscalculating their budget. In either case, investing too much or too little is a mistake. It’s crucial for a prospective franchisee to accurately assess the various costs involved. These costs include entry fees, royalties, franchise fees and training costs. There are also investment costs, potential revenues and financial projections for the franchise.
There are several options for financing your business. Bank loans, investors, fund-raising… Whatever you choose, your financing application must be prepared, clear and concise. Don’t forget government grants. Whether regional or national, there’s plenty of help available to help you start your own business, and it can make financing your project a whole lot easier!
Don’t underestimate the network
The network is an essential component of your adventure. This begins with the franchisor. Establishing a relationship of trust with the franchisor is the key to a successful franchise. The franchisor’s role is to support you, reassure you and push you to improve. Its goals are your goals.
Participating in the life of the network is just as important. The network also means exchanging ideas with other franchisees. Building relationships with network members will enable you to share tips, tricks and best practices. But what does network life involve? It means taking part in regional and national tours, and attending conferences and training courses. These events are a way for you to keep up to date with your network. It’s also an opportunity to meet new franchisees, and help them by sharing your experience and advice. This strengthens solidarity within the network!
