Overcoming Obstacles to Franchise Ownership: A Path to Success

Becoming a franchise owner is a dream for many aspiring entrepreneurs. It offers the allure of being your own boss while leveraging the support and brand recognition of an established business. However, the path to franchise ownership can be fraught with obstacles. From financial hurdles to operational challenges, overcoming these obstacles is crucial for success. Here’s a guide to navigating the common obstacles on your journey to franchise ownership.

2. Uncertainty of Success: Navigate due diligence and plan for success

Challenge: It can be overwhelming trying to understand a franchise brand’s potential in your market, the true cost for you to get open, how you will confidently finance that start up, and what your realistic breakeven and profitability projections will be can be overwhelming. Working with an experienced franchise coach who has done it will help. From labor laws to franchise agreements, navigating the franchise landscape is complex.

Solution: Reduce the fear of the unknown with fact acquisition.

• Startup Investment:  Build a true project cost calculator by diving into due diligence beyond a franchisor’s general claims in their FDD. Every market is different.
• Plan the Funding: Whether you’re investing with cash, financing, investors/partners, or a mix of those options you need a plan. Knowing your costs above helps, establishing contacts and a plan for how and when you will receive funding is a good start. The smart and timely deployment of your funding is the next level of opening on time, on budget, and on a path to profitability. 
• Breaking Even: Run a realistic breakeven scenario by utilizing public information in the most current FDD. Temper these expectations by conducting market research outside of the brand alongside diligent validation with current franchise owners in the brand.
• Projecting your Success: Running realistic projections is necessary for any type of financing package you pursue. But investors/partners will want to see your plan. A solid 2-3 years of financial projections backed by a confident understanding of the three bullet points above, will get you open and benchmarking your progress against realistic expectations. 
• Consult Experts: Consider a franchise attorney to help you understand the franchise agreement and ensure compliance with all regulations. Contact a small business accountant/CPA to get your bookkeeping and taxes in order. 
• Stay Informed: Keep up-to-date with changes in laws and regulations that affect your business. Join franchise associations that provide resources and updates on legal matters.
• Implement Robust Systems: Develop and maintain systems and processes to ensure ongoing compliance with all requirements both regulatory and franchisor related.

Click here to download my free eBook: From Pizza to Prosperity: An unvarnished look at what it REALLY takes to succeed in Franchise Ownership.

this is 2 of a 4 part series of entries about common obstacles to achieving franchise ownership.