My name is Saunak Patel and I’m here to debunk the typical franchise ownership narrative. After working in the marketing field for two years after graduating, I felt like I was running in a loop. I wanted to be my own boss and enjoy time and financial freedom but coming out of my comfort zone was a challenge.
Persistent thoughts of self-doubt didn’t help the process either.
“I’ve never run a business, what if I fail?”
“Wish I started earlier, am I too late now?”
“Should I partner up with someone initially?”
After overthinking and wasting a few months (which I regret looking back now), I knew taking action would be my only motivation. So, I decided to become a franchisee, which I saw as an opportunity for an initial helping hand, instead of starting from scratch. It seemed like a great way to start a business and learn how to run one.
Thoughts on buying an existing franchise business
Five years later, after successfully opening 11 franchise stores, I would like to discuss my thoughts on owning a franchise business.
Firstly, you would have to know yourself better. Make sure you are fit to be a franchisee. If you do not like to follow orders and regulations this might not be the best option. Yes, you may be the boss but you would still have to follow all the rules and regulations stated in the franchise agreement. You wouldn’t be able to add your creativity to your business or add any products.
Do your homework
Googling “Which franchise is the most profitable?” isn’t necessarily the best way to get into a franchise business. Choose a business and a particular franchise that you would like to be a part of and genuinely enjoy it. Make sure to read through their franchise agreements and see if you could deliver what they want and how they will be beneficial to you.
Look for the resources they will be provided to help you out and weigh out your options. Visit those stores and talk to the franchisees. Ask them about the pros and cons and their honest opinion. Just remember a popular branded franchise might not always be profitable. Dig deep and ask the owners about the hidden expenses and costs to run that particular franchise.
Location, location, location
I cannot say this any louder and it might be self-explanatory, but finding the right location is the key to running a successful franchise business. I wouldn’t recommend opening a store at a location just because you found a cheaper rent. The rent could be less at that location for a number of reasons.
Make sure to choose a location with a good balance of residential and industrial foot traffic – as you could target both populations. Look out for easy access to customers and finding a place with extra parking space is always a bonus.
Don’t get duped
This happened to me initially when I was buying the business of other franchisees. I invested in the business just by looking at the sales reports the franchise would provide me. I was naïve enough to make a decision just by looking at his previous reports and profits.
I later found out the franchisee was faking his sales. He would punch in extra orders into the POS and up the daily sales by faking it. The only downside of that is he had to pay the extra royalty fee on those fake sales out of his pocket but that way he would make more when he sold the business.
To avoid those mistakes, make sure to ask the seller for his/her’s weekly delivery invoices to see if the sales match the number of items ordered. You could also ask neighboring businesses how the business is doing and if they see a lot of foot traffic there. Walk in as a customer, spend some time there, and see the foot traffic yourself. Do not get duped by relying on sales reports.
Yes, every business has its lows and highs and this isn’t any different. Your monthly income will always be a surprise and be different every month. Plan and budget accordingly. Make sure you have extra cash to burn in loss months. The store that I thought would do exceptionally well did not do as I thought but that is part of the business.
Of course, there are many other factors to owning a franchise business. If you are looking own one and feel like you would be the best fit for it, I say go for it. As I said earlier taking an action will be your only motivation. That first step is always the hardest yet the most important –– so go for it.
Saunak Patel is a young entrepreneur who owns and operates 11 franchises – all before turning 30 years old. He believes in working hard and investing harder.
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