Are you longing to become your own boss but don’t know where to start? Do you want to take on more independence without the risk that comes along with starting from square one? If this is the case, franchising might be for you! Offering several perks such as a reliable reputation and successful business model, deep personal satisfaction, low start-up and overhead costs, major ROI opportunities and more, becoming a Franchisee is a career path that appeals to many. We asked five experts their advice for aspiring business persons who are just starting out in the franchise world and this is what they said:
No One Guarantees Your Success But You
For those just getting started, it’s important to understand what you’re really signing up for. While opening a franchise comes with most of the leg work done for you — between the existing business model, established reputation, low startup costs, etc. — owning a business isn’t for everyone. When you purchase a franchise, you are literally becoming your own boss, and only you can hold yourself accountable for your success.
Alan Guinn, Managing Director and CEO of The Guinn Consultancy Group shares his advice for those considering opening their first franchise:
“If you’re a new Franchisee, you make an assumption that the Franchisor is going to be there to guide every effort. That’s not always the case. If you are an existing Franchisee, you may decide to lean on the Franchisor to deliver. That’s a mistake. Realize that as a Franchisee, you execute a written Franchise Agreement that stipulates you are being granted the opportunity to develop a business; be sure to note the distinction that you are not signing a guarantee of success from the Franchisor. No one guarantees your success but you. It’s true that a Franchisor offers you a system which has been developed and can assist you in areas of business development which you may not have experienced previously, but the basic decision making as to whether or not that system makes sense for you as an Operator still needs your business acumen to guide it to success. Look at any business system or Franchise cautiously. Be sure their Franchise Disclosure Document contains all elements, including that of the specific responsibilities of both parties.”
While opening your first franchise is a fun and exciting experience that comes with great potential, it’s important that you consider all aspects of the opportunity before you. So prior to signing on as a Franchisee, it is important that you understand what the job entails and that you are committed to curating your own success.
Be Committed to Perfection
Like any business owner, Franchisees need to be self-motivated individuals driven for success. Without such a work ethic, it is nearly impossible to achieve great results. Sharing such an opinion is Brigida Aversa, Chief Operating Officer and Co-founder of Tiny Hoppers:
“When it comes to turning a single business into an entire franchise, being committed to perfection is critical. If you’re a business owner who has the opportunity to expand, you must understand the importance of duplicating that first success. Having multiple successful franchises is the ability to produce that same brand message across all of your locations. Whether you’re on the east coast or the west coast, when consumers see your brand’s name, they must know what kind of product and service they’re about to receive. Unfortunately, this is much easier said than done, making it vital to be committed to ensuring every employee from every location, understands your brand’s directive”.
When investing in a franchise, you are investing in a pre-existing business model and reputation, both of which are responsible for the business’ ongoing success. This is what makes the idea of franchising so appealing to many. In order to replicate such success within your own franchise, it’s crucial that you have a solid understanding of the building blocks that made such business thrive in the first place.
Follow the Franchisor’s System to the T
One of the main reasons why franchising appeals to so many individuals is that this type of business model comes with a preexisting business system and years of success behind it. This means that you can start your own business and become your own boss without the risks that come with being an entrepreneur.
Steve Yapp, owner of Local PODS emphasizes the importance of following your Franchisor’s established business model:
“Follow the Franchisor’s system to the T. The whole point of joining a franchise is to take advantage of their experience (usually from numerous operators) and fine-tuning their systems to in turn provide a profitable business.”
While starting a franchise will provide you with the independence that you’re looking for, it’s crucial that you remember to use your resources. You may have your own vision of where you wish to take your business and that is great, but don’t forget that you have a backed business model to support you. Franchisors provide you with a tried and true system, so take advantage!
Incorporate Your Franchise Strategically
When opening a franchise in Canada or the United States, it’s required that you incorporate your business. While there are multiple ways to go about this, some types of corporations have certain advantages over others. For example, in the United States, incorporating your business as an S Corporation allows you to avoid double taxation at the corporate level while gaining overall credibility with consumers as an incorporated business. Deborah Sweeney, CEO of MyCorporation.com goes into this in more detail:
“It’s a requirement that franchisees incorporate their franchise. Many choose common business formations, like LLCs and Corporations, but I also recommend looking into incorporating as an S Corporation. An S Corporation begins as an LLC, which makes it a C Corp with an S Corp tax election. That S Corp election tells the federal government to tax the entity as a partnership and not as a corporation, allowing the franchise to avoid double taxation at the corporate level. Instead, an S Corp may have its profits, losses, deductions, and credits ‘pass-through’ the entity level and taxed only at the shareholder level. Franchisees will need to pay themselves a salary or ‘reasonable compensation’ to keep the IRS from reclassifying corporate earnings as wages. As an S Corporation, franchises may also save money on FICA payroll taxes and gain overall credibility with consumers as an incorporated business.”
This is great advice for those in the US who are looking at starting a franchise. However, S Corporations are limited to American businesses. While it is still required for Canadian businesses to register their franchise, they will have different options to choose from. It is important to do your research prior to incorporation to ensure you choose the option that best suits your needs.
Talk to Fellow Successful Business Owners
In the business world, it pays to know people. In fact, networking is the way to get ahead in almost every industry. By reaching out to successful business owners, you open the doors to new insights, support and advice that will only set you up for success.
“If you’re thinking of entering the franchise world and are opening multiple offices, it is essential to talk to fellow successful business owners. Over the years, I’ve gained so much insight and knowledge from networking, which has undoubtedly helped me get to where I am now. Before expanding your business, do your research and learn about the hidden costs and time frame it should take to eventually make a profit. Along those same lines, make sure you’re comfortable running some of the financials of the operation. As a business owner with multiple franchises, it’s vital to become a master of budgeting, and are always willing to learn new and improved ways to mitigate costs.”
Yapp gives similar advice:
“Talk to as many current and or past Franchisees as possible to get the best picture of what you will face. You will find that Franchisees are more than willing to share what they have learned in an effort to make your location a contributor to the overall brand representation and brand promise.”
Not only does speaking with the experts give you the advice you need to be a successful franchise owner, but you can also learn from their mistakes (and avoid repeating them). There are many responsibilities that come with being a Franchisee and receiving firsthand tips and pointers get started with your best foot forward.
At the end of the day, owning a franchise is an extremely rewarding and satisfying career. At H2GO Mobile Wash, we offer franchising opportunities to self-starters looking for a fast track to success. And with our services being more essential now than ever before, there has never been a better time to join our thriving team. Whether you’re just starting out your career or looking for something new, we’re excited to hear from you. If you’re interested in joining our team or would like to learn more about our franchising opportunities, book a call with us today!