Dos and Don’ts: How To Become a Successful Franchise
Taking on a franchise business is the start of an exciting and rewarding journey. Franchising provides small businesses with the opportunity to grow on the stable foundation of established brands without being worried about the risks involved. As a franchise owner, aligning your efforts in the right direction can help you reap better benefits and gain higher ROI. Here are some guidelines to help you navigate through the grey areas and make better decisions that will ultimately strengthen your business.
Dos for franchisees to climb the ladder of success
Hire the right people
From the customers’ viewpoint, your employees are the ambassadors of your company and the brand. Hiring people with an irrelevant skill-set or wrong attitude will cause unwanted damage to the business. On the other hand, finding the employees whose values and skills align with your business will give franchisees an edge over other competitors.
An amateur mistake several franchisees do is hiring random candidates and expecting the training from the franchisor to turn them productive. While interviewing the candidates, rather than just testing the work-related skills, the franchisee must understand each candidates’ mindset and working style to ensure they are in sync with yours. Hire the best possible candidates and use the training to improve their productivity even more.
Utilize the resources wisely
Franchisors offer a variety of support services that aid in the business growth of the franchisees under them. Utilizing these resources strategically can make a world of difference in your business growth.
Some of the services usually offered are marketing assistance, tech support, and training. Jugnoo provides its franchisees with the latest technology, user-friendly customer and driver apps, training and even customer support to make operations easier for the franchise owners. Choosing the right franchise company (one that offers the support services you require) can accelerate your growth.
Delegate responsibilities to ensure better performance
Being your own boss doesn’t mean you have to run the entire show by yourself. Delegate responsibilities wisely to reliable and trustworthy employees to ensure better performance in each department.
Also as the boss, you need to understand the customers’ needs and evolve your business accordingly. Delegating responsibilities allows you freedom and time to explore ways to develop strategies and build your business further.
Do competitive analysis and set KPIs to track progress
For the better functioning of your business, you can gather key data and information on the existing businesses in your area. Through the competitive analysis of this data, you can decide on key metrics and set them as benchmarks to track your progress as a franchisee. Sales, profits, labor costs, and cost of goods sold are some of the KPIs often used by owners to track their performance.
Conduct marketing campaigns to expand the customer base
Marketing and branding campaigns at the grassroots level help the business perform better. Franchisee owners are better aware of the local environment and can implement the campaigns better to attract a wider customer base.
Having a proper marketing plan and following it can work wonders for your business. Rather than spending money, it is the planning and execution that gets the desired results. During the initial days, franchisees offer incentives and discounts to attract customers. Such campaigns can successfully create a high adoption rate for your business among the public. Franchisor companies support such efforts from their franchisees and often assist them strategically and financially to carry out these campaigns.
Don’ts to avoid pitfalls
Don’t just choose a “hot new franchise”
Older franchises have polished their business model through years of experience. While there may exist several hot new franchises that look lucrative on paper, it is always a better idea to choose one which has been proved successful in different locations and has stood the test of time.
With success in various different locations, experienced franchises have faced a variety of obstacles and have formulated solutions to overcome them. These readymade formulas can smoothen your experience as a franchise.
A prime example of the attractive proven franchise model is Jugnoo Rides. Jugnoo is operational in 50+ cities and has enrolled over a lakh driver in the process. With this vast experience, Jugnoo has developed a model which is highly profitable to franchise owners and simultaneously attracts drivers and customers. Such franchises provide the best opportunity for aspiring entrepreneurs.
Don’t forget the operational costs
While assessing the financial situation several franchise owners take only the fees and initial investment required into consideration. This can lead to a shortage of funds soon as all businesses incur operational costs. These include expenses such as rent, employee payroll, office supplies, and other utility costs.
Operational costs usually vary depending on the nature of the franchise. In some cases, the franchise may not start generating profits in the initial months. So it is necessary to have funds set aside and make the franchise get through the first few months and onto the profit-generating phase.
Don’t forget the importance of planning
The system developed by the franchisors has stood the test of time and has succeeded in multiple locations. So avoid blindly deviating from the model used. Franchisees can easily adapt the given system to the local needs with the guidance of the franchisor company. This, in turn, allows the franchisee to yield profits without worrying about the risks.
Don’t fail to seek legal advice
Being franchisee, you may have to enter into agreements with other merchants for business purposes. Having a legal specialist at your disposal makes navigating around the terms and conditions easier. Before, signing agreements/contracts, take legal help and request a detailed explanation for areas that you find difficult to comprehend.
Don’t forget to keep a track record of revenues
Franchisees are an investment and it is necessary to keep the complete track record of revenue to monitor how money is coming in. You can use this track record to check the viability of your model and compare it to your competitors. Moreover, this data can help you tweak your model and drive in more profits.
Running their own business is a dream come true for many and franchises provide a straightforward path for doing so in a low-risk environment. The guidelines mentioned in this blog aim at assisting franchise owners to successfully run their business efficiently. Making decisions with due diligence along with these simple dos and don’ts can help you go a long way in building your franchise.