What challenges are you likely to experience as part of franchise ownership on the road to entrepreneurial success? Here are some thoughts from the experts.
10 Challenges Franchisees Face
To understand the exact challenges franchisees face, Arizona-based facilities services company OpenWorks spoke to some franchise industry experts. It then compiled a list of 10 specific challenges and some disadvantages that franchise owners may face.
Let’s take a look at what the experts have to say.
Investing in a Business (Franchise or Non-Franchise) is Risky
Unlike a startup business that can take off on a shoestring budget, a franchise requires you to put your money on the table.
You Have to Stick to Certain Rules
When you own a franchise, you must be prepared to play by certain rules. You cannot add your personal touches with the objective of improving the brand.
Most Franchises Have a Minimum Net Worth Requirement
Your chances of owning a franchise depends largely on your financial strength.
Owning a Franchise is a Big-Time Commitment
You can’t be a part-time franchise owner. You have to make a serious commitment to run the establishment.
Consider Your Community – Will This Franchise Succeed There?
A smart franchise owner does his research before diving into the business. A comprehensive research helps franchise owners assess their local marketplace.
Rick Grossmann from Franchise Hub says the “evaluation should include the suitability of the business model for the region, competitors and overall available customer base for the products and/or services.”
Expect High Start-up Costs
Expect start-up costs to go high when you enter this business.
Be Prepared for a Complicated Exit Strategy
Different franchise systems have different exit strategies. In many cases, there are multiple steps involved in disposing off your franchise.
Make Sure You Have Adequate Support
To succeed, you need a franchisor who can provide comprehensive support along the way.
Be Prepared for a Long and Tough Approval Process
It’s therefore best to consult other franchisees to have a clear understanding of the approval process.
Find That Work/Life Balance
Owning a franchise can be taxing and it might cut into your family time.
To know more about the challenges franchises face, take a look at the infographic below:
BK Photo via Shutterstock
Well, there are downsides to buying a franchise. The advantage is that you get to do business with a known brand and you don’t have to do the marketing yourself.