Does Buying a Franchise Guarantee Success?

Many entrepreneurs are under the impression that buying a franchise will guarantee success.

Does Buying a Franchise Guarantee Success?

Many entrepreneurs believe that the franchise fee that is paid up-front ensures a proven business methodology and future wealth, particularly in South Africa, where franchising as a concept has taken off. This couldn’t be further from the truth. Unfortunately it is much tougher to make any business succeed.

Anything that is worth something will require hard work. There are no miracle franchises out there just because the name of a franchise is well known does not make success a given. It will take your personal skills and qualities to make your franchise profitable.

You will also have to commit to your franchise for it to become successful.

If you are in the process of researching a franchise, here are a few key criteria for success:

  • The willingness to take full responsibility for all aspects of the business and not be dependent on the franchisor to make your business work. The location of your business, the time you have to invest, your management skills, and changes in the marketplace will all have an impact.
  • An ability to repeatedly execute a predefined system and not try to reinvent it all the time. The franchisor must be open to new ideas to ensure continuous improvement of the system. However, the franchisor has rules and procedures that are designed to protect you and your fellow franchisees. And the only business model the franchisor knows how to support you on is the model you purchased. One of the most important things to understand as a franchisee is how to lead while following. Lead your employees and your business but follow the system. Following a different route will defeat the purpose of buying a franchise.
  • Provide sufficient working capital from your own resources to ensure that you remain committed. Know that you will not make money right away. You will need to pay an initial franchise fee, and, depending on the business, you might have to sign a lease, pay for signs, inventory, marketing, salaries, and royalties, all before you’re making any money. It can take several months to several years for a franchise to start making a profit.
  • Stick to a brand name and do everything you can to build it. A good franchisor will provide a proven brand that will continue to be successful if all franchisees remain committed to the system.
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