5 Common Franchise Problems and How to Deal With Them

The franchise business model presents fantastic opportunities for veterans as it allows them to be their own bosses while tapping into the experience and existing business models of credible brands. Veterans also tend to be a great fit for franchise businesses since the model requires individuals that are used to following the rules or complying with highly-regulated operating systems.

While some people might struggle with franchises, veterans usually take to it like a duck takes to water. And since people tend to perform better when doing the things they like, veterans can find franchise opportunities in a sector they like or have an interest in. So, someone interested in the cleaning industry can look up janitorial franchises for sale. If food is your passion, you’ll find no shortage of food franchises to buy. Other franchise opportunities include home improvement franchises, lighting company franchises, business service franchises, and so on.

There are several factors to consider when choosing a franchise business. Some of these include the reputation of the franchisor, investment costs, training and support, and so on. But even with this, there are problems that may still arise. These problems come as part of the package deal of franchisees, and understanding them will help franchises navigate around them. Here they are:

1. Higher Than Expected Operating Costs

Franchise businesses tend to require significant investment. Many people make the mistake of considering just the franchising fee and cost of business premises and equipment. But in reality, there may be other associated costs like marketing costs and even other hidden fees.

So, it’s important you are aware of all associated costs associated with a franchise business. And this can be figured out by reading through the entire Franchise Disclosure Document (FDD) and contacting existing franchisees for information.

1. Long Approval Process

There’s a lot at stake for the franchisor in the franchise agreement, and this mainly involves the reputation and credibility that took years to build. This means franchisors take their sweet time to select franchisees, and many have come up with long, robust, and even complicated processes to determine whether to approve a potential franchiser’s application or not. Since most franchise agreements are usually around 10 – 15 years contracts, it even makes more sense for franchisors to properly vet applicants.

As someone trying to buy a franchise, the truth is it isn’t much you can do to expedite the approval process. However, submitting all required documents can speed up the process as there’s less back and forth between you and the franchisor.

While no one is fond of the long approval process, you should be wary of franchisors that approve applications too fast.

1. Managing The Business

Not everyone is built to manage a business. However, the good thing is that business management is something that can be learned. So, before you buy a franchise, carry out an honest assessment of your business management skills. Are you a people person? Are you charismatic? Do you have good leadership skills?

It’s okay if you don’t tick some of the boxes of the skills required to run a business. Many franchisors are happy to help franchisees with implementing operational systems as well as organizing training and development programs. You can also depend on some franchisors for ongoing support.

You don’t want to buy a franchise only to find running the business a burden. While there is no way you can completely prepare for the role of a business owner, you have to understand that it may not always be rainbows and sunshine.

1. Hiring the Right People

As a franchisee, your responsibilities include running the business at the ground level and recruiting new employees. And the people you hire can make or break your business.

Since you are a franchisee, you aren’t going to make many of the rookie mistakes most businesses make. But hiring the right people can be a challenging task for people that have never run a business. Again, your franchisor can come to your rescue and help you come up with a robust recruitment strategy.

A recruitment strategy is a right step to hiring the right employees as it makes the organization realize the type of people they are really looking for. Then comes the interview process and the selection of qualified candidates.

New employees have to be onboarded and properly trained. As you can see, it’s a pretty complicated process, and you may need your franchisor to help you with it.

1. Lack of Autonomy

The franchisor calls all the shots, and this means less control over the brands for franchisees. While this may be frustrating for many people, it’s important to remember that the franchisor and franchisee are partners working towards the same goal. Also, the franchisee isn’t without a voice as they can always contact the franchisor and voice their opinion. If they can back their opinions with numbers and facts, then the franchisor will have to seriously consider their point of view.