Owning a business is its own high-wire act. Fortunately, owning a franchise let’s you experience the rewarding thrills and minimize the risky spills with a well-grounded business model and a safety net in the form of proven programs and reliable support.
But the safeguards a franchisor offers in a legally, binding Franchise Agreement come at a cost—a franchise fee, on-going royalties, and your commitment to follow their systems.
As an entrepreneur, you’ll be inclined to measure the value of your expenditures based on widely accepted return-on-investment calculations. However, the programs and support you can expect from the franchisor have both tangible and intangible values making investment decisions a balance of using your head and following your heart.
A franchisor will typically offer site selection services, initial training, on-going assistance, and advertising and marketing guidance. The breadth and level of support you receive will vary and depend on the industry; the size, financial resources, and experience of the franchisor; and, the culture of the company.
To ensure that you realize the most value for your investment, here are a few essential questions you need answered (to your satisfaction) before you sign any agreements:
- What is the overall attitude of the franchisor to supporting franchise owners? Is it an obligation or a franchisee-first approach?
- How accessible is information and are Home-Office professionals? Will I have a dedicated field representative?
- Does the franchisor foster a franchisee peer network?
- Are the marketing materials “off-the shelf,” or customizable?
- Does the franchisor have vendor relationships to improve my margins and increase my profitably?
- What Value-“Added” programs does the franchisor offer?
An example of Value-Added or Proven Concept is the Allegra Marketing Print Mail Profit Mastery Program for ongoing financial modeling and performance improvement including “peer based” performance group interactions. Another is Allegra’s Acquisition Program where the development department assists franchise owners in acquiring independent competitors.
A franchisor has a vested interest in your success, as do you in helping to build the system. Unit and system growth will increase your equity in the business and it further benefits you as the franchisor hires more support staff, leverages vendor relationships, and expands and strengthens the brand’s presence and power.
In the end, whether you are new to franchising or are an experienced business owner, the value of the programs and support that a franchisor offers is ultimately based on and amplified by how often you USE what is made available to you, how committed you are to PARTICIPATE in the network, and how faithfully you VALIDATE the franchise opportunity. And, though you may find the value of the programs and support hard to quantify, you’ll find that most if not all will be invaluable.