Tips for Getting Started in Franchises
Franchise business models can be an exciting way to make money whether you are creating the brand or buying in to a successfully established franchise chain. While there are a lot of exciting articles out there with great tips for entrepreneurs beginning their business journey as franchisees, there are very very resources for those looking to found tomorrow’s successful franchises. There are a few best practices that every franchise founder needs to know about to be successful, though.
Set an Accounting Standard
One of the keys to success in this industry is accurate accounting and reporting. Since many of your license holders will be first-time entrepreneurs, it’s up to you to create the processes they will internalize. Well-designed accounting processes help you get a better picture of the volume of sales being done across the brand, and they also help you with accurate income reporting and compliance with financial laws. They help your franchisees by showing them a clear, unambiguous, and thorough way to track their own progress as their location takes off.
Dedicate Resources to Legal Compliance
Compliance for franchises can be a thorny issue. You’ve got third-party liabilities not seen in other business models, as well as the regular legal and financial regulations, including those governing your workforce at your headquarters and in locations across your markets. Following that is often a full-time job, and it’s important to set yourself up with the support you need.
Run the Day to Day Personally
If you have good help with your accounting and legal compliance, you should be able to focus on the day to day issues that arise as you grow your brand. Innovating with your marketing team, overseeing quality control, and communicating with your franchisees are all going to be key to your success, and you can’t afford to outsource them. For those who start franchises, the difference between growth and stagnation is involvement. This isn’t a business model that allows for turnkey operators.
There are a lot of ways to run a chain without franchising it. If you aren’t sure about taking the plunge as a franchise founder, consider starting up a chain you own as a sole proprietor or creating a corporation to own them. If you build a successful series of locations, you will only make yourself more attractive to potential franchisees when you do make your move, and if you decide there are too many locations to manage when you launch, you can always sell them to people who want to take over an established storefront.