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Franchise Tips

7 Things to Know Before Becoming a Franchisee

By June 11, 2019 No Comments
7 Things to Know Before Becoming a Franchisee

Starting your own business as a franchisee can be both exciting and terrifying. While it is empowering to become your own boss, sometimes quitting your stable job to do so, it is also a step that shouldn’t be taken lightly. Moving from a position of security to one of greater risk and reward can be both a daunting and humbling process. With that said, going through this journey with your eyes open to what lies ahead can allow you to thoroughly think through and anticipate what awaits you.

Choosing between franchising vs starting your own business can be a daunting process. In many ways, there are additional considerations that potential franchisees must weigh to fully grapple with the business decision that they are making. In this article, we’ll outline a number of facets of franchise ownership that you should strongly consider prior to signing on the dotted line.

Some of this information may encourage you to realign your expectations so that you can more accurately anticipate what will be expected of you once you get up and running. Others will require you to look deep within yourself to find the things that motivate and drive you, and determine realistic pathways to using those core aspects of yourself to push your success to new levels.

Franchise ownership, just like starting your own business from scratch, carries risk. As with all things risky, it is important to enter a franchise relationship with a full-field view of what your business operations will look like. To this end, the tips we outline in this article should encourage you to exercise a high level of due diligence before you commit to becoming a franchisee. With appropriate planning and foresight, you’ll be able to hit the ground running and follow the steps to successfully start a gym franchise with Rush Cycle.

How Much Will it Cost?

Before you commit to any franchise operations you need to have a clear idea of exactly how much it is going to cost. Take the time to arrive at a figure that includes the purchasing cost, ongoing royalties, and the amount you’ll actually need to get your doors opened and customers in. You should also gain a clear sense of when your business should start turning a profit. This can help you avoid stress and accurately align your expectations.

Alongside understanding exactly how much your franchise will cost to become profitable, you should be clear on how you are going to fund this opportunity. Most franchise opportunities will require some type of liquid capital up front, with the rest through other funding sources. Additionally, you may not have to get funding through a bank due to the fact that some franchisors offer their own internal funding programs.

How Much Time Will it Take?

One area where many franchisees struggle when they first start is grappling with how much time they must invest in their business. It is true that franchises have different requirements than traditional independent business ventures. Your branding, products, and training are generally provided by the franchisor. This may make you think you can hire the right people, delegate effectively, and check in regularly. However, in most cases, this simply isn’t realistic.

It is not uncommon for individuals to quit their day job to start a franchise, only to find out that they are spending more time at the franchise than they spent in their old job. Even with the resources and support that a franchise relationship provides, starting your own business and establishing long-term success requires hard work, dedication, and often an on-the-ground presence. By approaching your new opportunity with a realistic expectation for the amount of time you’ll have to personally invest in it, you’ll avoid frustration and burnout once you open your doors.

What Kind of Help Will You Recieve?

One of the core strengths of a franchise opportunity is the fact that you gain access to a large pool of resources that can help you hit the ground running. Unfortunately, in some franchise relationships you may actually think you are going to get more help then is provided when you need it.

Before you sign any agreement, you should have a very good idea of what type of help you will receive from the franchisor. Different franchisors offer different levels of assistance to their franchise owner, so you will have to ensure that the level of support you receive once you open your doors is adequate. The expectations for both franchisor and franchisee should be clearly outlined in the Franchise Agreement, so be sure to carefully read this document, ask any questions you may have, and consult with an attorney who specializes in Franchise Agreements.

What is Your Goal?

It is important to always enter a new business opportunity with a clearly defined goal, especially when purchasing a franchise. Your goal should be realistic and attainable. Many people purchase a franchise with the goal of leaving behind their 9-5 job. Once they start their business the hope is to have greater independence and flexibility in their schedule and finances.

While this is an attainable goal over the long-term, it is perhaps not realistic in the short-term. New franchises require a large amount of time and effort invested into them until they experience the long-term stability that many business owners are searching for. Have in mind your long-term goal for opening a franchise, then set realistic milestones to achieve that goal. Reaching those milestones will be a gratifying experience that motivates you to keep going.

How to do the Research

It may seem simple to jump into a new franchise opportunity, but this is exactly the wrong way to do things. You can easily get yourself in over your head if you don’t begin your business from a position that is fully informed of what lies ahead. Not everyone is an expert at researching new business opportunities, but the good news is that it isn’t as hard as you think.

There are a couple of documents that you’ll want to carefully read; the Franchise Agreement and the Franchise Disclosure Document (FDD). The Franchise Agreement is your formal contract between the franchisor and franchisee, so you will want to fully understand this document so that you are aware of the obligations and expectations for both parties. The FDD is a document provided to prospective buyers of a franchise so that they can make an informed decision about what they are buying into. The FDD will include information such as any bankruptcy’s the franchisor has filed, what their business experience is, what the estimated initial investment for the opportunity is, what your territory will be, and much more.

Retain an attorney that is experienced in handling Franchise Agreements, but don’t leave everything up to them. Be sure to carefully read through the documents yourself, and if you have any questions don’t hesitate to ask them before you sign on the dotted line. It can also be a good idea to talk to other franchisees to find out about their experiences. If every franchisee you talk to is interested in selling their franchise, it may be a good indication that the opportunity isn’t right for you.

What Motivates You?

So far we have asked you to take a hard look at what your long-term goals are. Now, we want you to turn that lens inward and assess what motivates you. What is driving you to take on this opportunity? How do you see this opportunity helping you grow? Are you passionate about the product you are going to be selling or is this simply a smart business decision?

Take the time to really drive down into what is motivating you towards this opportunity. By doing this exercise, you can help separate the thoughts and feelings that sometimes drive us towards doing the wrong thing at the wrong time. By establishing what it is that motivates you about this opportunity, you can take that information and use it to propel growth within your new successful business.

Get to Know Your Franchisor

The relationship between franchisor and franchisee should not be underestimated when it comes to the ultimate success of your venture. Take the time before you sign your contract to really get to know the franchisor. Understand what their corporate culture is like, what their operational philosophy is, and how they view and support growth.

Other franchise owners are a great source for this information, as they should have a better idea than most about how the internal operations of the company are. At the same time, understand that an owner and their relationship with the franchisor may be complicated. Take the time to see for yourself how the franchisor views their role and operates their business.

Franchising With Rush Cycle

For a franchise to be successful, a lot of things have to line up. Being a franchisee comes down to being the right person in an area and at a time when an opportunity for growth presents itself. Position and timing are key, but so is working with a partner that understands that your growth contributes to their success.

Rush Cycle is one of the fastest growing fitness franchise opportunities because we believe in developing a deep partnership with our franchisees. Rush Cycle’s unique approach to fitness drives change in the lives of our attendees and promotes sustainable growth for our franchisees.  At the heart of Rush’s successful business model is an understanding that the culture we create and the people we work and interact with are the lynchpins of our success. We develop close partnerships with franchisees to help guide them through the process of creating sustainable growth while giving them the flexibility they need to adapt to their local environment.

One of the challenges that many franchisees run into is a lack of engagement with the franchisor. Without a strong bond between the franchisor and franchisee, neither can continue to grow. Through ongoing engagement, we help franchisees identify hot markets and get up and running quickly and efficiently. With the help of our marketing approach and retail design, you’ll hit the ground running. Lastly, with our unique, in-house franchise training program your instructors will deliver consistent, high-energy classes that leave your customers revitalized and stress-free after each and every workout.

Closing Thoughts

Being a franchisee requires hard work and dedication. The advantages of franchises are substantial, as they give entrepreneurs access to a proven business model, a recognizable brand, and the operational support to see that they succeed. However, not all franchise opportunities are equal, and before pursuing a franchise opportunity you must perform a certain degree of due diligence.

We’ve outlined seven of the most important things that we think you should know before you become a franchisee. Being a franchisee isn’t for everyone, so you should have a clear idea of what you are getting into before you buy a franchise. This includes understanding what motivates you and setting clear, attainable goals. Your due diligence should include collecting the knowledge and resources you need to make an informed decision. Retain the services of an attorney familiar with franchise arrangements, and be sure to work closely with them as you comb through the Franchise Agreement and Franchise Disclosure Document of your prospective franchisor.

At the same time, don’t forget the human side of things. Take the time to understand your franchisor while seeing how their business model functions and how their company culture aligns with your own passion and views. It also doesn’t hurt to speak to other franchisees, which can provide invaluable insight into how they view their relationship.

Remember, starting a franchise is a huge decision and one that shouldn’t be taken lightly. It may require more time than you anticipate to grow to a level you are comfortable with, yet that journey can be profoundly transformative and beneficial.

At Rush Cycle we are always looking for new entrepreneurs that share our passion for fitness. If you are interested in joining the fastest growing indoor cycling franchise in the United States, please contact us today.

Sources

  1. https://www.entrepreneur.com/article/305010
  2. https://www.entrepreneur.com/article/36480
  3. https://www.entrepreneur.com/article/254051

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