Becoming a franchisee has its fair share of exciting yet trying moments. For many new franchise owners, the road to success is not always a challenge-free journey, especially at the beginning, but mitigating those challenges with care and thoughtful planning will help make the process of opening a franchise location a better experience for everyone involved.
This post will outline some of the common hurdles that many franchisees can face when opening a new location. We always recommend for any franchisee, whether you are opening a location for the first time or are well-versed in the industry, to thoroughly review the Disclosure Document provided to you from the franchisor. Many questions you may have can be answered by this document, and it is full of important and updated details that you need to know before opening your location. Carefully examining this document can also help prevent any unnecessary hurdles you may face from the jump.
Navigating Start-up Costs
Investing in a franchise location is exactly that – investing. It is important to remember that besides the initial franchise fee that franchisors require, there are a variety of additional costs associated with opening a location, similar to any other type of business. Beyond opening day, there are likely to be additional costs as time goes on to keep the location afloat.
The required sum of start-up costs can vary depending on which industry you enter, but for a dog daycare facility, this investment can range from $543,193 – $1,489,801, which includes a range of operations such as equipment costs, training, and working capital for initial operations. At Dogtopia, we require prospective franchisees to have a minimum liquid capital of $300,000 and a minimum $1 million net worth for this very reason; having available funding from the start will help ensure this isn’t a hurdle you have to face when opening your franchise location.
However, even if you are financially prepared to open a franchise, it is still very common to have some questions when navigating exactly how much money to allocate and where. For instance, working capital is the amount of money needed to support ongoing expenses, and it is important to determine how much you will need, which will vary depending on your business. It is common for franchisors to give you an estimate beforehand, but franchisees can help solidify this number once the new location is up and running.
Again, many of these start-up and ongoing costs are outlined in the Disclosure Document, such as advertising costs and royalty fees. To better navigate any of the fees associated with opening a franchisee location, and to avoid any hurdles that could prevent you from not having the necessary funds available, prior planning is important in addition to generating a plan once you are in your location. Creating a budget and outlining the allocation of funds is key.
One of the great things about entering a franchise business is the business model you get to adopt by the company. In fact, this is one of the many reasons why so many professionals make the career change to franchising because of the proven model that is in place.
As well, many franchisors are responsible for the training and ongoing support provided to franchisees, which can help a franchisee feel more confident to carry out this business model, especially if they have no prior industry experience. However, when it comes to the recruitment and hiring of employees, who will subsequently also carry out this established business model, that is the franchisee’s responsibility.
For first-time franchise owners, hiring employees may seem a bit daunting. However, it is important to first identify the details of which roles you need to fill, how many employees you need to fulfill these roles, and what qualities you want your employees to demonstrate. Asking yourself these key questions can help you generate a plan, which can help make the hiring process go much more smoothly.
Some franchise owners may feel as though the weight is on their shoulders to create job ads and job descriptions, but many franchisors can assist in this process. Although it is your responsibility to onboard employees, there can be a variety of materials you can access, such as hiring and training materials that can be useful.
It is important to remember that with any business, hiring employees can feel very much like trial and error until you find a solid team. This common hurdle can be overcome with a proper plan that outlines the expectations of the franchise itself, as well as what you as a franchisee require of your employees. This transparency can create a work culture that promotes teamwork and can allow you all to collectively reach business goals together.
If you enter an industry that you are not extremely familiar with or you have never run a business before, it may take some time to adapt to the new responsibilities on your plate. You may require some extra time to fully understand how the business model works and your responsibilities, but that is where the support from your franchisor comes in.
As a franchisee, your responsibility is to typically carry out operations of the business and meet the standards that are expected, but with any new role, it can take some time to adjust. It is important to keep this in mind when opening a franchise location and remember that your franchisor is there for support. There will be ups and downs, and you will discover your strengths and weaknesses, but that’s part of running a business. You will eventually get into a groove that works best for you, your team, and the business.
In the beginning, it can feel like you are wearing many hats, and that may be true. However, once you acquire a team of employees, you can begin to delegate tasks and meet both short and long-term business goals more quickly and efficiently. This may take a bit, but your responsibilities will become clearer as time goes on.
Similar to navigating your new responsibilities, finding a work/life balance can be a hurdle you may need to overcome. Being a business owner can be overwhelming at times, especially at the beginning, but thankfully franchisees have the support and proven business model to rely on. It is important to put great effort into your franchise location but finding that balance is also key.
Once you have established a team of employees to train and delegate tasks to, you may find a work/life balance easier to incorporate. However, as with many hurdles that present themselves at the start, it can be easier to find solutions as you fall into an efficient pattern, which can come naturally with time.
If you are interested in franchising with Dogtopia, please review our next steps page, which will take you through what to expect from the franchise process.