For many entrepreneurs, the idea of owning a franchise is exciting. Unlike starting a small, standalone business, a franchise business offers owners more security and a proven framework. However, before you pull the trigger on becoming your own boss and investing in a franchise opportunity, there are several things you should know. These five tips will help mentally prepare you to overcome challenges, push through the growing pains, and make your franchise dreams come true.
1. There will be hidden costs
While buying a franchise is undoubtedly cheaper than operating a start-up business, there are often hidden costs that franchise owners might not be prepared for. Six common costs include:
- Franchise fees
- Royalty payments
- Product sales
- Updates and improvements to systems and technology
- Continued training and conferences
2. You’ll need to be comfortable taking risks
In order for your franchise to succeed, you’ll need to be comfortable handling risks. Business risks can be influenced by things like sales volume, per-unit price, input costs, competition, economic health, and government regulations. While there is no real way to completely diminish your risk, there are things you can do ensure you can handle it and position yourself for success.
3. The greatest model of all time
Often referred to as the greatest business model ever invented, the franchise model has helped countless people just like yourself become the owners of their own business. Knowing this model is key before you invest in a franchise business. The premise of the model is simple: someone implements a service or product and turns it into a business that can be easily replicated. However, instead of using his or her own personal funds to grow the business, they get an investor or two to help run it as franchisees. Thus, the person who developed the idea will be the franchisor and use the franchisees’ money to grow the business.
4. Understand your personality type
Though it may seem irrelevant, knowing what type of personality you have can make a big difference in the way you approach franchising. One of the biggest things to consider when reflecting on your personality type is how you view rules. Are you a rule follower or do you like to blaze your own path regardless of set precedents? Do you tend to tell yourself you don’t have a problem following the rules but ultimately struggle to follow them once they are in place?
Rules and guidelines are often credited for helping franchise businesses be so successful, and in the corporate setting there will always be a set of rules to follow. So take some time to be honest with yourself about who you are and what you feel comfortable with.
5. Planning is critical
Lastly, before you invest in a franchise, you need to know that having a clear plan of action is absolutely vital. Having an idea of how you’re going to run and grow your business is just the beginning: before you start talking to lenders or even begin to complete extensive research on what, how, and when you’ll embark in the franchise business, you’ll need to have a real, formal business plan that outlines your goals, strategies, projects, etc. Not only will this help you when applying for a loan, but it will also help determine the true direction of your franchise.
If you think that owning a franchise is the path for you, consider investing in a Bruges Franchise. As a leading restaurant franchise, Bruges has the brand recognition, support, and business model you need to be successful. Contact Bruges for more information, today.