With so many startups sprouting in Africa (more than 3000 in Nigeria alone as of 2024), statistics have shown that about 70% of startups fail within their first five years. Does this mean that you shouldn’t bother having your own business? Far from it! Instead, you could consider becoming a franchisee.
Joining a franchise is like joining a club, but instead of playing games, you get to run your own business on another brand’s name! And the brand will help you make sure you’re successful!
But, what does it mean to be a franchisee? How can one be eligible to become a franchisee? What are the key duties of a franchisee? And how do you choose a franchisor?
Let’s find out!
Understanding what it means to be a franchisee
What does a franchisee do? Imagine you want to start a food stall, but instead of cooking your own rice, you want to sell rice that’s already popular and delicious. That is it! You pay a special fee to the person who cooks the delicious rice (the franchisor) so you can sell that rice with the same recipe at your stall.
You have to follow their rules, like using their special packaging and brand designs, and pay them a franchise fee as agreed. But that’s okay! Lots of people already love their rice, so you’ll get to piggyback on their success. So, being a franchisee is like having a special partnership with someone/ or an organization that already has a successful business, and you get to be a part of it!
Becoming eligible to be a franchisee
If owning a franchise is appealing to you, you need to make sure you are up to the task. Let’s examine 6 ways you could do so.
- Conducting Market Research: Look around and think about what kind of business you want to start. Consider what type of franchise you want to join, what people in your area like, and whether they will buy the product. This will help you make a good choice and find a franchise that works well for you and your community.
- Evaluate Opportunities: Find a few businesses that do what you want to do, and compare them to see which one is the best fit for you. To decide, think about:
– What you’re good at
– What skills you have
– What resources you have
Next, match these with 2-4 businesses that you can imagine yourself running.
- Call Existing & Former Franchisees: Talk to people who are already part of the team to get the inside scoop. Ask them about their experience working with the company and the franchisor. This will help you learn more about the business and enable you to make an informed decision.
- The Application: Let the franchisor know you’re interested in joining their team. They’ll ask you some questions to see if you’re a good match. This is the first step in the application process.
- Discuss the Franchise System: Meet with the parent company to learn about their franchise system. Create a business plan and show them you have enough money to invest. If everything looks good, you’ll attend a special training session to learn how to run the business successfully.
- Training: If you complete the training successfully, you can join the team and open your own store or business! But, if you can’t pass the training, the franchisor has the right to cancel the agreement. This is usually written into the contract.
Roles and Responsibilities of a Franchisee
Key franchisee responsibilities include:
1. Brand management
As a franchisee, if you’re partnering with a well-known company (the franchisor) you can’t risk doing anything that will negatively affect the brand’s image. So you must:
- Keep the brand’s good name and reputation
- Follow the brand’s rules and guidelines
- Use approved ads and marketing materials
- Keep the brand looking the same everywhere
- Protect the brand’s trademarks and secrets
- Follow the brand’s policies and procedures
- Join national marketing efforts
- Promote the brand locally through social media and community events
This helps keep the brand strong and consistent, which benefits everyone – the customers, the franchisor and you!
2. Leadership
Playing a leadership role is one of the key responsibilities of a franchise owner. You’re responsible for leading your team, setting goals, teaching and guiding your team members. You’ll need to create a happy work environment, make big decisions, and run the day-to-day business.
You’ll also manage money and follow rules and regulations. You’ll be the one guiding your team towards achieving goals and making sure everything runs smoothly. With your leadership, your business will thrive!
3. Finance Management
Finance management is one of the most important franchisee responsibilities. First, you’ll need to make an initial payment to start the franchise, followed by regular royalty payments to the franchisor as agreed. You’ll also contribute to marketing and advertising efforts, purchase necessary equipment and supplies if it is part of the agreement (most times not), and pay employee salaries and benefits.
In addition, you’ll be responsible for rent or lease payments for your franchise location, insurance premiums, and taxes at the local, state, and federal levels. You’ll need to submit financial reports to the franchisor and pay ongoing fees for things like technology and training. By staying on top of these financial responsibilities, you’ll be well on your way to building a successful franchise.
4. Customer engagement
Stellar customer engagement is necessary for franchisee management. This will include being friendly and helpful to customers, getting to know them and building relationships, listening to their feedback and complaints, and fixing their problems quickly. You should strive to make sure customers are happy, and encourage them to come back.
You need to stay up-to-date with what customers like, make the store a welcoming place, and represent the brand well. Also, engage with customers on social media and host events to attract new customers. By doing this, you’ll create a loyal customer base and drive business growth.
5. Communication
As a franchisee, you must communicate well to succeed. To do this, keep the franchisor updated on your business, answer their questions and requests, and attend meetings and training. Be ready and willing to help customers and fix problems, give feedback to the franchisor, and stay informed about franchisor news and updates. Making proper communication a part of your daily operations will help you build a strong partnership with the franchisor and enjoy a successful franchise.
6. Training and support
Before starting your franchise, you must finish the initial training the franchisor gives. You might need to receive more training and attend workshops to ensure you are abreast of industry trends. You should also ask the franchisor for help when needed. Use what you learn in your daily work, and stay updated on industry changes and best practices. In addition, share knowledge with other franchisees and train and support your employees. This will help you carry out your franchisee duties effectively.
7. Marketing
You must follow the franchisor’s marketing plan, employ local marketing strategies to attract customers and use social media and other online platforms to promote the business. You should also join national and local advertising campaigns, keep the brand image strong and consistent, and work with other franchisees on marketing efforts.
Additionally, track and report marketing results and customer feedback, and stay updated on industry trends and marketing best practices. This will help you to effectively promote your franchise and attract customers to grow your business.
8. Recruitment
It is up to you to hire and train staff to meet the franchisor’s standards. Another major franchisee role is ensuring that your employees sign a non-disclosure agreement. You’re also responsible for doing background checks if needed, providing ongoing training and development, and keeping accurate employee records.
Also, you must follow labor laws and regulations, hire staff fairly and without discrimination, and meet the franchisor’s staffing requirements. All of these contribute to building a strong team to help meet your franchisee expectations.
Choosing A Franchisor
Before becoming a franchisee, you want to ensure that the franchisor would be a good fit with your business goals and values in order to avoid costly mistakes and financial losses.
When choosing a franchisor, think about these important things:
- Is the franchisor trustworthy and successful?
- Does the business model fit your goals and skills?
- Will you get good training and support?
- What are the costs and fees?
- What’s in the contract?
- Is the brand well-known and respected?
- How much money do franchisees usually make?
- What do other franchisees say about their experience?
- Does the franchisor follow the law?
- Can you grow and expand your business?
Being a successful franchisee requires a strong work ethic, ability to follow systems, and effective communication with the franchisor and customers. You’ll need to manage finances, staff, and operations, while also meeting the franchisor’s requirements. It’s essential to carefully research the franchisor, understand the franchise agreement, and seek legal and financial advice before signing. With the right mindset and support, being a franchisee can be a rewarding and profitable business venture.
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