12 Helpful Tips for New Franchise Owners

The future of franchising looks promising as it offers entrepreneurs a business model that provides stability in difficult times. In general, franchising carries less risk than starting a business from scratch, which increases the probability of your success

With that being said, you don’t want to just buy a franchise on a whim. You should be prepared to make well-informed and strategic decisions regarding business ownership. Here are several tips to consider when buying a franchise that will help set you up for success. 

#1 – Know Your Market Inside and Out 

It’s crucial to understand the market you are planning to enter as a business owner so that you can know how to best service your community. You should regularly perform local market research to stay on top of relevant trends or changes in the industry. You can also speak with existing franchisees to increase your market knowledge. While not required, it’s also helpful to have some hands-on experience at a lower level within the industry (e.g. working as a barista before becoming a cafe owner). 

#2 – Know Your Franchise Brand Like the Back of Your Own Hand

One perk to buying a franchise is you don’t have to build a brand from scratch, which can make the path to business ownership much smoother. However, that doesn’t get you out of all the work. You must understand everything about the brand that you’re joining, from the products and services offered to what makes customers love that particular brand. You need to understand the terms of the franchise agreement and represent the brand accordingly. Staying true to an already established brand is key to your success!

#3 – Choose Your Financing Wisely

Of course, buying a franchise requires a significant financial investment. In addition to certain liquid capital and net worth requirements, franchises also require an initial fee. You will need to pay this along with any other costs required for starting a new business location. Whether you have the money yourself, need to procure financing from a lender, or have a payment plan with the franchisor, you should know the details of your payment terms so that you can plan effectively.  

Further reading related to this topic:
How to Buy a Franchise With No Money: Is It Possible?
Buying a Franchise With Bad Credit: Is It Possible?

#4 – Understand Your Skills and Shortcomings

Business owners need to be able to wear a variety of hats, but that doesn’t mean you can’t delegate responsibilities that aren’t your strong suit. In fact, doing so is a strategic way to operate your business. Recruiting individuals to handle areas where you need help allows you to focus on areas where you’re more skilled. Implementing this type of self-awareness will significantly benefit your business. 

#5 – Set Your Franchise Up in the Right Location

If you buy a franchise that requires a brick-and-mortar, then you should carefully consider your location. The physical location of your business can make or break it. For example, a restaurant will do better in a touristy part of town with lots of foot traffic. Your franchisor may have tools and resources that will help you choose the right location for your business. 

#6 – Establish a Solid Team of Support 

Depending on which franchise you buy, you might need to establish a team of employees that will run different aspects of the business. This is a great opportunity for you to build a solid team of people that have different skills to contribute. Make sure you choose individuals that you can trust to represent your business well when you’re not around. 

#7 – Focus on Hiring and Training

It’s important to hire trainable individuals who are willing to fit in with the franchise’s structure. You can set your team of employees up for success when you equip them with the knowledge and skills they need to effectively do their jobs. Start by offering detailed job descriptions and comprehensive training opportunities. You should also take advantage of any onboarding materials and training programs the franchisor offers. 

#8 – Leverage Your Franchise Network

Franchisors typically offer valuable support and training opportunities to their franchisees. After all, they know how to make your business succeed, and it’s in their best interest to help you. Make sure you make the most of the resources they provide. Following their systems and heeding their advice is key to succeeding as a franchise owner.   

#9 – Purchase the Right Tools and Technology

Technology options might not be the first thing you think about when starting a business, but it’s important to utilize the tools and technology that will meet the needs of your business now and in the future. For example, a top-notch POS (point-of-sale) system will allow you to effectively manage your inventory and track your sales. You can employ other systems to monitor calls and train your employees. There’s nothing more frustrating than running into technological obstacles. Make sure you find technology partners that offer great customer service, training, and have 24/7 availability. 

#10 – Prioritize Customer Service

Providing excellent customer service is the best way to gain loyal customers that want to see your business grow. Of course, good customer service comes from good employees that are trained to manage everything from standard tasks to handling upset customers. Creating a company culture where employees feel respected and cared for is foundational to them providing great customer service. It’s also crucial to have systems in place that ensure customers consistently have a great experience. 

#11 – Get Involved in Your Community

Finding ways to support the local community is a great way to attract customers to your business. There are many ways you can donate your time, money, or services. A few examples include donating your products and services to those in need, offering discounts to community heroes, or setting up a kiosk at community events. Caring for the local community is great in and of itself, but it will also reap benefits for your business. 

#12 – Don’t Neglect Marketing

Franchisors will likely have a marketing plan for you to follow – another huge advantage to joining a franchise! They’ll provide marketing materials along with directives to help you market your business. Marketing methods include building your online presence through social media, SEO (search engine optimization), or PPC (pay-per-click) ads as well as reaching out to the local community via flyers and direct mail. Marketing is often vital to growing your business, so you’ll want to take it seriously. 

Ready to Hit the Ground Running?

If you’re planning to buy a franchise, these tips will give you a great start. FranNet is also here to help with every step of the process. At no cost to you, our expert franchise consultants will provide the resources you need to make an informed decision. You’ll have hundreds of verified brands to choose from. Schedule your free consultation today to get started! 

Oct 24, 2023