What it Takes to Make it in Franchising

Janine Allis, founder of the international franchise, Boost Juice, recently visited South Africa and shared her views on what it takes to make it as a franchisee.

What it Takes to Make it in Franchising

Q: What in your opinion makes a franchise business successful?

We believe it is the ‘Ps’ – people, product and position. People need to have a desire for what they do, that’s what is needed to grow a business. Our product has made the business transferable to other countries. We always look at what is available in the country before we launch. Having the best position is critical.

The Boost Juice franchise is very much a walk-by concept so it is essential to find a location with high traffic. Apart from those three aspects, it is also important to market yourself properly. Whenever we open a new branch we have a big launch so that people can see us and taste the products. One other aspect is getting feedback from people. It is good to get this so that you can find ways to turn a disgruntled customer into a fan.

Q: What do you look for in a franchisee?

We look for like-minded people. We are not just interested in selling franchises, we want to find the right people with the right attitude. They need to have some business experience but the most successful franchisees have passion and an attitude to succeed. If you think franchising is going to be nice and easy then don’t get into the business. It takes a lot of blood, sweat and tears before you get the flexibility of being your own boss.

Q: So you do think there is flexibility in owning a franchise?

For the first two years you have to be involved in the business to run it. Retail is detail and you have to manage cash flow and expenses tightly.

Q: What are some of the most important qualities a franchisee should possess?

In a franchisee interview I look for the right attitude. Also I favour a husband and wife team as one will usually work on the business while the other still earns an income. This means there is less financial pressure in the early stages and they will usually have different skills that can complement each other.

If the franchisee has no business experience, I recommend doing a few short courses, it is particularly important to have a basic understanding of accounting. Boost will teach you how to run the franchise, deal with customers, use the technology and improve sales but we don’t teach accountancy.

Q: What about getting outside help from a bookeeper?

It is a big mistake to hire a bookeeper; instead you should find an expert on software like Quickbooks. They can teach you how to do the basics so that you are handling every invoice and paying everyone. The products are amazing for small businesses.

If you do your own accounts you will pick up mistakes that quite possibly a bookeeper wouldn’t. It is vital to take the time to learn. Don’t just say that you are too busy in the store, if you are not doing your own accounts you are losing at least 20% of your profits.

Q: How important is it for a franchisee to be an owner manager rather than employing a manager to run the store?

Many franchisees can be owner managers of one or two stores, but a good owner manager is one who can leave their store to go on holiday and it continues to run efficiently. To do this you need to hire the right people. I’m a firm believer in hiring the right people. A great manager is a leader.

By having the right people, systems and processes in place, they give themselves options after two years. This could be buying another store or having a significant amount of flexibility. But some people don’t ever get there because they are unable to lead or hire the right people.

Q: Why do you think it is better to be part of a franchise than opening an independent business?

The international statistics are positive. Only one out of five independent businesses survives, while four out of five franchise businesses survive. Apart from that, by being a franchisee you are part of a network which has better buying power. You also contribute to a marketing fund, which means you get more bang for your buck, and you are part of a group of people on the same journey – you get head office support but also interact with people in the same situation as you. You should get to know the other franchisees so that you can get together and help each other out. As a franchisee, you have other people thinking about product development, using resources you couldn’t afford if you were to open ‘Joe’s Juice’.

Q: How can a franchisee ensure they are choosing the right franchise for them?

They need to look within and think ‘What am I passionate about?’ We find that our franchisees are usually interested in health and fitness and have a sparkle in their eyes. Once you have identified what you are passionate about, you need to look at what’s available, and then at the franchise itself. How long have they been around, how many company-owned stores are there, the structure, do you like the people and can you find solutions with them?

Q: How important is it to invest your own money in a franchise?

Whether you are investing your money or money from a bank, it’s still your responsibility. The best option is to borrow the least possible as paying off a loan adds to your monthly expenses. Using your own money takes a bit of the pressure off.

Q: What advice can you give franchisees?

You need to have the right attitude. We have a saying, ‘Don’t be a VERB, rather SOAR’. VERB stands for Victim Entitled Rescue Blame and SOAR, Solutions Ownership of problems, Accountability for outcomes, Responsible for your own success. The outcome from this response is more positive. Being accountable for your own business is powerful. Saying it is my fault when something goes wrong gives you incredible power. I hate the word ‘try’ – you have no option but to do it.

Q: How much research should a franchisee do before buying a franchise?

They need to do an enormous amount of research but should beware of ‘analysis paralysis’. I know of some people who spend up to five years researching a franchise, and never get around to actually buying it. You need to look at financials, the brand, the business and do your own site research – you can sit at the site and do headcounts for a few hours.

Make sure that you meet with the franchisor and talk to them face-to-face as well as other franchisees who will give you the ‘warts and all’ information.

Q: What would you say is the biggest challenge for franchisees?

Staffing is a big challenge. Don’t settle for mediocrity, find people who are bubbly and hard working. Always do a reference check, but if this is their first job determine whether or not they are confident, and have numbers acumen. You may get it wrong sometimes, but be sure to fix it quickly.

Q: What are some of the most common mistakes franchisees make?

Thinking that it is easier than it actually is, not doing their own accounts, mismanaging their expenses and holding on to staff who should have moved on. One other mistake for female franchise owners is not replacing themselves when they have a baby. If you don’t find a replacement you can expect your business to go down by at least 20%.

Franchise Zone
About the Author
Franchise Zone is published by Entrepreneur Media SA. It offers advice and franchising opportunities in South Africa.

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