Franchise companies have a strong business model and system for franchisees to follow. However, it is important to note that claiming a franchise can be just as risky as controlling another small business.
When it comes to franchising, the good news is that it works well if done intentionally keeping in mind certain rules. To achieve a viable franchise launch goal, a step-by-step process has to be followed and some mistakes will be avoided. There are several important issues you need to analyze before deciding to buy an Xtend-Barre franchise wherein you will be connecting with an ambitious, supportive community dedicated to improving the health and lives of people globally.
If you are planning to buy a franchise business, there are certain rules to keep in mind to avoid some of these common mistakes:
Neglect Your Due Diligence
During your due diligence process, it is important to promote an authentic cross-section of the business overall, this includes talking with current and predecessor franchisees. It is great to do research and talk to more and more franchisees, but it is also important to support financial and legal advisors so that you can evaluate it before you plunge into it. Due diligence is often not discerned but should play an important role in your pre-decision-making process. You should not believe what the franchisor tells you – do comprehensive searches on brands, industries, and fury that attract professionals.
Profit Before Enjoyment
When people examine their franchise options they often begin by identifying areas or business models that are considered attractive. While earning money matters, there is also a clear correlation between franchisees that succeed in getting owners excited by the industry of their choice. Choose something that you find satisfying and you will have the determination to overcome the inevitable hurdles and motivate your employees to do the same.
Blind Believer Franchisors
As franchisors want to expand their franchise, they turn to the market by showing how big and popular they are. It is your responsibility to ensure that along with a popular brand, the franchisor provides you with some important services. This includes location selection, training, an effective marketing plan, and more that help you stand on your feet and succeed in your franchise business.
Undercapitalized
When you are setting up your business, it is important to have enough money available. Often, the reason some people fail to franchise their business is by underestimating the capital required for the business to flourish. In addition to the initial investment required to set up a franchise, franchisors must ensure that they have sufficient funds available to support the new franchise system, especially during the initial 6–12 months. The International Franchise Association (IFA) released its annual Economic Outlook Report, which details the franchise industry’s projected economic forecast for 2021.
The report takes an in-depth look at the development trend of franchising following the economic downturn caused by the COVID-19 pandemic.
Lack of Planning
Planning is the most basic management process that exists. Success in planning is not guaranteed because plans must be implemented. Especially for companies that are just starting, not planning enough can be one of the biggest problems of an entrepreneur.
However, there is no lasting success without a sustainable plan for growth, loyalty, and combativeness. Basic plans should focus on monthly and annual revenue, plus profit and expenditure numbers. A franchisee whose plans are thoughtful and monitor output identify fashion, consumer cycles, and other opportunities that can be capitalized. Intensive and quick planning leads to high income and eternal success.
The Take-Away
The best way to ensure that you have set yourself up for success is to overcome any pressure to make quick decisions. Don’t progress to the next stage unless you have enough capital to allow time to move at a slower, more measured pace.
Research is also important during the process of franchising your business. At each step, make sure you have the discernment and mastery to make an informed decision. Although most franchises are considered established businesses, buying one does not eliminate all the risks of starting and running a small business. Learning from other people’s experiences and mistakes will help reduce these risks. If you are planning to start a franchise, make sure that franchise buyers often do to avoid the above common mistakes.
