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Franchisee Advice

Sidestepping Common Franchisee Mistakes

5 strategies for avoiding the most common franchisee mistakes.

Kyle Zagrodzky

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When people want to start their own business, franchising is an enticing option. It offers many of the perks of entrepreneurship, plus the safety net of operating a business based on proven concepts and systems. However, too many prospective franchisees start to think of buying into a franchise as a guarantee of success.

And, as many of us know, anything advertised as a ‘sure thing’ is always a myth in the business world.

Certainly, when franchising is operating the way it should, it will provide unit operators with a strong support network, great educational tools, sales templates, and initiatives and processes to guide every stage of the unit’s life. But no matter how fantastic a franchise concept seems, and no matter how many of its franchisees have made money, franchisees can’t forget that success ultimately depends on them.

Throughout my franchise development career, I’ve seen franchisees make the same handful of mistakes over and over again. Avoiding these errors seems simple enough in theory, yet they continue to hold back franchise entrepreneurs who otherwise have plenty of potential.

Related: Common Franchisor Mistakes… And How To Avoid Them

Here are five ways to avoid making these common mistakes.

1Develop a network with other unit owners

Part of the appeal of joining a franchise is the access it provides to a network of people who understand exactly what it’s like to run a business unit within that brand. Yet many franchisees still end up feeling disconnected and unsupported after their store opens.

That’s why franchisees should take advantage of the networking tools their franchise offers, because having a group of fellow franchisees to lean on can help everyone to grow and thrive.

A great franchise will give franchisees plenty of tools to keep in touch with one another, whether that means social media groups, weekly calls, regional directors who connect people and regular events where franchisees can meet in person.

2Accept total responsibility for your business unit

When things don’t go well in a franchise unit, often it’s because the franchisee isn’t prepared to take responsibility. It’s easy to play the blame game and make excuses, but that kind of attitude doesn’t go very far when it comes to actually fixing the problem.

Franchisees need to have realistic expectations and understand that not every unit will perform at its peak right away. But more than that, they need to accept that their business’s success or failure is ultimately on their own shoulders.

If things aren’t going as well as expected, franchisees should focus on the principles learned during their training and rely on the network of owners who may have been there, too.

The difference between a winning franchisee and one that needs improvement is the owner’s willingness to take responsibility for learning the systems and driving the numbers on the books.

Related: Avoid These 3 Simple Mistakes When Buying A Franchise

3Focus on daily goals and sales objectives first

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When a franchise isn’t performing, usually there is a root cause, and most of the time it traces back to the unit owner’s lack of focus on what really matters. So many franchisees get caught up in the day-to-day details of running a business and forget that their ultimate goal is simple: Prospect and sell.

If a franchisee suffers from tunnel vision and is too focused on unimportant tasks, we coaches help them zoom in on specifics that can help them grow.

Every day, the franchise owner’s main objective is to drive sales, and that’s where the bulk of his or her time should go. It’s the first goal that must be achieved.

4Stick to the marketing plan

Becoming part of a franchise doesn’t guarantee success; it means you have access to tools, templates and support that can lead to success — but only when you use those tools.

A franchise is designed to duplicate a single successful business model again and again, and the system works, but only when the franchisee follows that business model.

If he or she goes rogue and doesn’t use the concepts, sales tactics and branding the franchise is built on, things probably won’t work well.

Franchisees can’t believe that people will show up and buy their product or service just because the doors are open. You have to work to drive sales, and the system is there to streamline that process.

Related: Franchising Mistakes You Need To Avoid

5If a unit under-performs, be open to fixing the underlying cause of the problem

Franchises are made for franchisees to succeed based on an established system. So, if a unit isn’t making its weekly, monthly, and quarterly goals, there is generally a reason behind the slump. A lot of research, planning and investigation goes into choosing franchise locations, so the street address may not be the issue.

Similarly, the systems and processes have been vetted in other locations before, so those shouldn’t be the cause of sales distress, either. Instead, when a franchise unit isn’t going all the way, a smart franchisee will turn to the company’s leaders and guides — assuming they’re reliable — to step in and help figure out exactly what the solution is.

When outside resources see the reason for the dip in sales, that same smart franchisee will then listen to the advice offered and implement the changes suggested. Franchisees not open to outside perspectives on how to improve can’t expect anything to get better.

Kyle Zagrodzky is president of OsteoStrong, the health and wellness system that boosts bone and muscle strength in less than 10 minutes a week using scientifically proven osteogenic loading concepts. OsteoStrong introduced a new era in modern fitness and aging prevention two years ago and has since helped thousands of clients between ages 8 and 92 improve strength, balance, endurance and bone density. In 2014, the brand signed commitments with nine regional developers to launch 500 new locations across America.

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Franchisee Advice

Factors To Consider Before Signing Up As A Franchisee

Franchising is a brilliant way to get into business with not many entrepreneurial skills as it comes with a roadmap to follow for success.

Diana Albertyn

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You’ve been considering entrepreneurship for a while, and now that you’ve finally raised some money and been approved for a loan, you’re ready to quit your 9-5 job to run your own business. You may even already have your eye on a particular franchise, but while franchising is considered an easier and more low risk way to get into business, are you suited to being a franchisee?

“The question is not ‘is franchising right for you’, but rather, are you right for franchising? Because if you don’t have the right attitude and skill set, it can be a very expensive mistake,” says small business expert and author Steve Strauss.

Franchising may seem like an easy way into entrepreneurship, but along with an established name and proven systems, come rules, regulations and little room for creativity. If you’re not ready to become a franchisee, but want to go into business for yourself, you may find yourself struggling to operate within the system’s blueprint.

Ask yourself these three questions before proceeding with the process of franchising:

1. Will you be able to follow the directions of the franchisor?

You’re buying into an existing and proven concept so it’s safe to assume that the franchisor knows best, and so you have to be open to learning and following guidelines for business success. If, for example, you have experience in advertising and think you have an improved technique of marketing the franchise, you may want to change the advertising material provided by the franchisor – don’t.

Related: 3 Ways You Can Innovate And Improve As A Franchisee

“Being a franchisee means following the directions of the franchisor, even when you think you know a better way,” advise experts from strategic and tactical advisory firm MSA Worldwide.

“In addition to initial training, you need to be prepared to accept coaching and advice from the franchisor on how you operate or market your location.”

2. Do you have the need to experiment?

Lou Groen may have had success in launching a new menu item that McDonald’s approved of in 1962, but not all franchisees are that lucky. Stick to the plan and limit deviations to the menu or anything that involves the customer experience.

If the franchisor’s concept doesn’t involve deliveries, offering them to your customers may cause issues for others within the franchise system. “If it’s not part of the franchisor’s concept, you’re deviating from the concept and therefore, no longer running your store as a franchise,” according to MSA. Franchising arguably limits innovation opportunities, so if you’re prone to implementing creative ideas and evolving business offerings based on said ideas, rather start your own independent business.

Related: 3 Pricing Tactics To Recession-Proof Your Franchise

3. Are you a team player?

These first two questions you address should already lead to the realisation that everything you do affects everyone in the franchise chain. One bad experience at your establishment and suddenly, all the stores are affected by bad press or unsavoury social media attention.

“Other franchisees are relying upon you to offer to the consumer a consistent level of service, product quality, and brand message. You are going to have to work with others in the system in making decisions,” advise experts.

Remember that as part of a chain of other business owners, you may have to accept that majority rules when it comes to decisions where franchises do have a say.

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Franchisee Advice

3 Ways You Can Innovate And Improve As A Franchisee

Although your role as a franchisee isn’t really to innovate, there’s room for creativity if you go about it the right way.

Diana Albertyn

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When you signed on the dotted line after reading and agreeing with the franchise agreement, you knew that you were buying into a proven system where everything has already been thought out for you, and all you have to do is follow the formula for success.

But you’re a franchisee longing to put your own imprint on your business, and it may be frustrating to feel boxed in by a formula, while you’re bursting with new ideas.

“Franchising, by its nature, discourages innovation on the part of franchisees, who are required by their franchisors to follow very specific policies and procedures on exactly what they will sell, how they will make or deliver it,” notes Randy Myers, contributing editor for CFO and Corporate Board Member magazines.

Related: Types Of Funding Available For Franchisees

This doesn’t mean your ideas will never see the light of day though. But before you approach your franchisor with your brilliant insight, consider the following steps that may well lead you down an innovative path:

1. Get the basics right first

Franchisors know that customers like consistency as it makes them comfortable and trust every location of their franchise they choose to visit. But, even the strictest franchisors get hungry for new ideas. It’s the timing that’s vital for your idea to even be considered.

“Most good systems don’t want new franchisees to even think about innovations until they learn the existing system inside out and prove that they can execute it like a star,” said Jeff Elgin, CEO of FranChoice, a network of franchise referral consultants. “At that point, they have become successful, their base is secure, and they have earned the right to consider innovations.”

It’s wise to ensure you’ve learned your franchisor’s existing business model before you suggest any improvements.

2. Do your homework

So, you’re doing well and you’re sure your idea will be welcomed as a crucial innovation to the franchise system – but research your proposal, suggests Kim Stevens, VP of Regional Development and Director of Franchise Awarding at Woodhouse Day Spas. “Especially if you’re suggesting something that would impact all franchisees, create a business plan before approaching your franchisor,’ she says.

Related: To Buy Into A Franchise Or Purchase A Licence? 3 Factors To Consider

It’s also good to have another look at the franchisor’s policy for accepting new ideas to ensure you’re prepared for tough questions before you propose your idea.

3. Speak to the right people

Elgin recommends you first identify the person at the franchisor’s head office who’s responsible for receiving new ideas. “Many of the ideas a franchisee comes up with will already have been proposed by another franchisee,” notes Elgin.

To avoid wasting your time, no matter how great you think the idea is, present it as early as possible before spending anything developing the idea.

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Franchisee Advice

3 Pricing Tactics To Recession-Proof Your Franchise

As consumers tighten their belts, how can you ensure your franchise is their first choice in the midst of strict budgeting and curbing of spending?

Diana Albertyn

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Whether or not there is a dip in the economy, you have stock on shelf you need to sell. But, if consumers are cash-strapped, you have to make every effort to ensure that your franchisees aren’t running at a loss.

“There’s no doubt that shoppers are more discerning about what they need and how they shop. However, quality remains significant and brands that continue to delight their customers will reap the benefit of being chosen,” says Ailsa Wingfield, executive director marketing and communications: Africa, at Nielsen.

Why not give customers the best of both – value for money at a competitive price – by applying one or more of the following pricing tactics in tough economic times:

1. Consider a greater focus on your house brand

“The days of in-house retail brands being treated with a fair amount of disdain by South African consumers have come to an end,” says Wingfield.

Related: What Makes Franchises Recession Proof?

The global performance management company’s research has found that R38.4 billion of the amount consumers spend at hypermarket and supermarket tills – or R10 out of every R50 – is spent on private label products. South African consumers are beginning to feel that the quality of these house brand products is as good as that of established name brands.

Since research indicates consumers are further likely to shift between branded products and retailer private label offerings, it would be of benefit to your franchise if your in-house products are perceived as viable value alternatives of similar or better quality.

2. Sell products in bundles

This the method combining various products and selling them together as one bundle for a lot less than if they were being sold separately. This method is great for moving items that might be selling slower but also great for achieving a higher value perception in the minds of consumers.

CEO of GuruShots, Gilon Miller, says there are several bundling techniques you could apply, including:

  • Pure bundling, where you offer a group of products that are only available as a bundle and aren’t sold separately.
  • Mixed bundling, where you offer products that are sold both as bundles and as individual units.
  • New- or lesser-product bundle, where you bundle a successful product with a newer or less successful product – the stronger product will help the other product find its way into a new market.

Bundling results in cost efficiency, more competitive pricing and might also encourage customers to regard a single store as a source for several solutions.

Related: How To Recession-Proof Your Business

3. Add even more value

When you price your product in alignment with the value your customer sees in it, you’re preventing both you and your customer from the possibility of losing out on value.

Calculating your optimum price, involves asking yourself these questions:

  • Will your customers save money or time by using your product or service?
  • Is your product or service is unique?
  • Will your product or service help customers gain a competitive advantage?
  • What does the competition charges?

“Value-based pricing ensures that your customers feel happy paying your price for the value they’re getting,” says Patrick Campbell, co-founder and CEO of Price Intelligently. “Pricing according to the value your customer sees in your product prevents you from short-changing yourself while creating an experience for customers that’s most aligned.”

The more value your customers see in your product, the more they will be willing to pay for it, ultimately improving your bottom line. When your pricing is reasonable, they won’t need much convincing to make the purchase at your franchise instead of your competitor’s.

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