A misconception with prospective franchisees is the belief that sticking a franchisors name over the door means instant success. What they don’t realise is that a franchise is made up of individual business owners, and that is where the real success lies. The franchisor’s most crucial job comes at the early stage – to make sure they choose the right franchisees for their brand. When my franchise brand is scouting a prospective franchisee, we spend as much time as we can learn about them and their personal goals. I’ve discovered our best franchisees all have the following traits in common. Do they sound like you? I’d love to talk to you.
1. You don’t want a job. You want a business.
The key difference between owning a business and having a job is that in a business, you are totally responsible for the performance of the business.
This can be a huge misconception for prospective franchisees. They may be coming from a corporate environment, where the actual performance of the overall business is someone else’s problem. You go home in the evening, and get to relax, secure in the knowledge that your salary will be paid, and your job secure. Not so in your own business. Every little decision you make has repercussions – good or bad. If you’re making a mess of things and not fixing it, there’s only one place the results of that are going to land, and that’s with you.
2. You love working with people.
All franchises involve you working with customers, and most involve you building a team. If you’re not great with people, then starting any new business, never mind a franchise is probably a bad idea.
I had a friend once who lived in a big house. He was very comfortable in his own company and didn’t really like visitors. When he told me he was thinking of putting the house on Airbnb, I didn’t think twice about persuading him that this was not a good idea. He didn’t like friends coming to his house, never mind complete strangers! We conduct psychometric tests with prospective new franchisees, partly to find out about this. Someone could be totally happy as a desk jockey – but for most businesses, you need to love people.
3. You are resilient and know how to bounce back. For most people, starting a new business is one of the most difficult and challenging things they will ever have to do. It’s not just the physical bit of working 12 hour days at the start, but the mental side of dealing with stress, deep disappointments, and crazy highs when you think you are a rock star. All businesses have highs and lows, and require exceptionally hard work, often for extended periods. You need to have the stamina and positive mental attitude to keep going, even in the difficult days.
4. Life never turns out exactly as your business plan thinks it will.
A business plan is a vital element of your preparation for opening your new business, and a good one gives you a road map, down which you drive yourself and your business.
But when preparing a business plan, you need to understand they never work out as planned. You will either do better than you think (this is a good thing), or worse than you think (not so good), but it is extremely rare for a business to perform exactly as predicted.
It’s a fact that all banks love business plans and insist you prepare one, but also know the predictions will not hold true. As one bank manager friend said to me “Brody, I have never seen a business plan presented to the bank that did not show the bank being repaid in full and on time”. This was not the bank’s actual experience in very many cases.
Of course, because very many business plans don’t work out exactly as planned, it’s your capacity as a business person to adjust your plan and keep adjusting it, until you get it right, that’s what separates the winners from the losers.
5. You are excited about moving outside your comfort zone.
Being in business for yourself often involves you having to do things that are really hard, and which in normal circumstances you would like to avoid. Having to let someone go is one. Another good example is cold calling. To go and knock on a stranger’s door, offering your life’s work for sale is really tough. But a successful business in many franchises requires just that. If you know your hit rate is just one in twenty, then you know your audience and learn to plan accordingly. Unsuccessful business owners will try it, slow down when the going gets tough, and then make excuses and stop entirely. Successful ones get it, and when they get the rejection, brace themselves as they stand in front of the next door.
6. You know when to step back and trust the brand’s decisions.
Being in a franchise means you have to sacrifice some of your independence and toe the line. The prize for your patience is greater and more secure profitability. You might want to paint your shopfront neon green and sell Pizza, but at our Thai restaurant chain, you’d have to walk over my dead body before I let it happen. That’s because your franchisor realises that a brand is about reliability, consistency, and a common standard. Common standards adhered to by all the franchisees is the best way to ensure the common good.
If you’re someone who really likes making all their own decisions, you might find the restrictions placed on you as a franchisee very frustrating, and you could be better off on your own.
7. You take comfort in being part of a bigger community and team.
While your franchisor will want you to observe their brand standards, keep to their standard operating procedures, and promote the brand in the same way as all the other franchisees, they also need you to be a motivated self-starter capable of making decisions and getting things done. This is about you being in charge of running your own business, and doing whatever it takes to make the business successful. Disaster for the franchisor is a franchisee who waits to be told what to do all the time.
8. You consider yourself a disciplined person.
Running any business requires huge amounts of personal discipline if it is to be successful. For example, in our retail restaurants, we have been extremely disciplined about cash. We take cash very seriously because if we don’t it has a habit of disappearing in an unexplained way. It’s so easy to lose money in business if you are not carefully watching your key performance indicators, and taking appropriate action where you are not meeting them. It’s very hard in the stress of opening a new business to sit down and work out your margins for the previous week, but if you want to avoid unnecessary losses and potentially running out of cash, you need to have the discipline to do these calculations every week.
9. You have to put customers and staff ahead of yourself.
It’s mostly a laughable misconception, at least in our company, that fat cat business owners exploit staff & customers to make huge profits for themselves.
Modern business owners realise that to generate consistent sales, you need to deliver great service, and put the needs and wishes of your customers at the centre of your business strategy.
Great service comes from staff who are happy with their work. And if they’re not happy in their work, your customers will notice it. Being of service to your staff and customers does not come naturally to everyone, but if like me, and thousands of other business owners you like doing it, then this is for you.
10. As a business owner, you need to be prepared to walk a lonely road.
This is not something people consider, but running a new business where you have to make difficult decisions can be hard on a person. Often things will be happening that you have no experience or knowledge of how to deal with. Realising that your business is not performing as it should and that you might run out of cash and the business fails, is a very lonely place to be.
Even with the support of a great franchisor, many times the buck stops with you, and that can be hard to handle mentally.
My experience in franchise businesses would suggest that the biggest risk factor for a new franchisee is not the franchise itself, but themselves. You are the most important element that makes the franchise business successful. In Camile, we give every new franchisee a specialised toolkit (business system, brand, marketing strategies etc.) However, it’s up to the franchisee whether they use this toolkit well, or at all.
Before making the decision to invest in a hands-on franchise, have an honest conversation with yourself about your strengths and weaknesses, and your capacity to be your own boss. If you have any questions, you know where to find me.
Good luck and stay safe. Brody