Let’s be clear from the start – franchisors want successful franchisees.
There is NO value to a franchise system if franchisees are simply not cut out to be in business and even the best franchise system will find it hard to cover the cracks of a franchisee who is obviously unsuited to the business.
So, the process of recruitment is absolutely essential.
To this end, any self-assessment is critical when considering taking a franchise.
YOU need to know that you believe you can make a success of the business.
There are many areas to consider and things you never thought warranted a second glance, that you need to think about.
If nothing else the whole process of self-assessment can be therapeutic!
For me, one of the hallmarks of a successful franchisee is energy. Running a successful business takes long hours, total focus and a high level of drive – so energy is critical.
Are you prepared for the long hours? Do you have the energy required? Can you give the business your full attention and focus?
What about your family?
Will your family will support this redirection – with your energy, drive and focus going into a business and not into themselves.
Shy people tend to find running a business more difficult, whilst arrogant/over-confident (‘know it alls’) people tend to make the worst franchisees.
In my 23 years of franchising I can safely say that the most successful franchisees, the ones who extract the most out of their businesses tend to be those who put their energy and focus I to absorbing and following the franchisors proven business systems and NOT fighting to ‘do their own thing’.
So, having the energy and channelling said energy into the right areas is a good start – but of course it is only a start if you can raise the finance to fund the franchise.
You need to be sure that you can afford the business – do not go into the business with no ‘wiggle room’ – rest assured you will need it.
The good news is that the major banks all have experienced franchise people and will advise on funding expectations.
For a solid, reliable franchise brand, you would expect funding of 70% of the total investment required.
Before going to the bank however you need to calculate your ‘own available funds’ (AOF) – to ensure you can both fund the 30% balance and have some working capital for the first few months trading.
Moreover, part of your OAF needs to be in cash.
Liquidity, allows you to move more quickly and allows you to fund higher priced franchises.
Of course, having funds is great and having access to liquidity also great BUT on the debit side you need to consider your on-going FIXED COSTS.
Obviously the higher the fixed costs the then the more pressure on the business to produce cash quickly –and this may be an unreasonable expectation.
SO, before you commit, take a good long hard look at your fixed commitments and ask yourself the question – are they really fixed OR could I do without them!
The final thing you should consider when assessing your own situation is ‘relocation’.
Ask yourself this question – are you, is your spouse, are your children prepared to move house, friends and schools for the sake of a new business.
In my mind the willingness to relocate for the right business opportunity is a simple decision, and I have previously made on more than one occasion and is I believe clearly the correct one.
However, all circumstances are difference and you need buy-in from all parties.
When assessing a franchise opportunity is it not the business that often warrants closest inspection but rather yourself.
Do you have the energy, the commitment, the willingness to follow a system?
Can you afford the business? Do you have personal funds – both asset and liquid to support yourself?
Are you prepared to reduce your ‘fixed’ cost base and take some emotional pain?
Would you be prepared to relocate for the right business opportunity?
Finally, do you have it in you to make the hard decision?