5 Truths About Being a Franchise Owner

Are you considering buying a franchise? If you're someone with spare cash or you’re eager to invest in an already established industry, a franchise is a reasonable venture to go for.  

Rather than trying to figure out how to start a business and how to successfully market one, all you have to do is adopt the franchise’s concept and follow its guidelines.  

There are indeed advantages to operating a franchise compared to starting a business from scratch.  Still, those advantages don’t imply a franchise is a guaranteed success.  Sometimes, you need franchise SEO to help your branch gain traction within the local community.

The reality of making a franchise work is harder than you think. In this article, we will discuss the pros and cons of operating a franchise and the five truths you need to know before becoming a franchisee.  

Advantages of Becoming a Franchisee

• Low failure rate compared to startups. Studies show that franchises have a success rate of about 90% compared to only 15% for businesses that are built from the ground up.  
• Valuable training and assistance. Franchises are turnkey operations. Owners get the help and support they need to kickstart their business to success. You’re provided with the equipment, supplies, management training, and even marketing. It takes the guesswork out of running a successful business.  
• Save money. Franchisors buy in bulk for a much lower price. The savings they generate from their collective buying power is passed on to franchises, which is why inventory and suppliers cost less for franchises than for startups.  
• Brand awareness is well established. Many franchises have national brand-name recognition, which means they're popular! Owning a franchise means you don't have to put as much effort into advertising your business compared to a startup. Customers will naturally come to you.  

• Quick Returns. Since franchises already have built-in loyal customers, you can quickly grow your customer base in your branch and make your business profitable in no time. Although franchise corporations, such as Tim Hortons and Mcdonald's, tend to have higher franchise costs, they also typically offer high profits and quick returns to their franchisees.

Disadvantages of Becoming a Franchisee

• You need to conform to the rules and guidelines. One of the disadvantages of owning a franchise is that you don’t have the freedom to run the business the way you like. To maintain uniformity and make sure that everything is consistent with the brand, you need to conform to their rules and guidelines. This includes the layout of your store, the furniture to use, pricing, and more.  
• Additional fees and other ongoing costs. Your franchisor might ask you to pay a certain percentage of your monthly profits as royalty. They may also charge you additionally for advertising.  
• No ongoing support. Some franchises only assist at the beginning. After that, you're all on your own.  

• High franchise cost. There's no denying that a well-known franchise can cost a lot, so you will have to provide a large sum of money upfront.  
• Risk of failure. Not all franchises are guaranteed to succeed, especially if you haven’t done your homework. You need to make sure that there’s a market in your area for the franchise you’re buying. You also need to study the franchise you’re buying. What’s their franchisee success rate? What’s their reputation?  
• No franchise SEO strategy specific to your branch. You may benefit when your franchisor advertises on a national level. However, this isn’t enough to make your branch highly profitable. If you want to take things to the next level, you need to have a local franchise SEO strategy. This will drive traffic to your branch and generate more sales.  

5 Truths About Being a Franchisee

Being a franchise owner is no walk in the park. Here are the five truths about being a franchisee you need to be aware of.  

1. It Requires Hard Work

If you’re thinking about buying a franchise because it’s the easy route to success, think again. Just like any other business, owning a franchise requires hard work.  

Although you don't have to put in as much effort in marketing a franchised business because brand awareness is a given, this doesn't automatically equate to success. You need to be driven and dedicated to running a franchise. It can also take years before you start seeing a return on investment.  

If you don't involve yourself in running your franchised business, especially at the beginning, you won't know how things work. Your employees can easily trick you; you can’t find ways to make processes and your staff more efficient, and you won’t know what improvements to make to help your franchise succeed.  

2. It May Take a While Before You Begin to Earn a Profit

Another common misconception about operating a franchise is that the customers and profit will automatically start flowing. Sorry to disappoint you, but on average, it takes a year or two before a branch becomes profitable.  

Before buying a franchise, develop a business plan to help you set expectations about when you are likely to begin earning a profit.  

A business plan will detail your goals, operations, marketing objectives, and financial projections. Pay special attention to your forecasted cash flow and breakeven point.

You should also have working capital to help you cover the costs of running your franchise until it can fund all its expenses. Additional working capital may also be necessary to support your business through ups and downs.

3. You Will Need to Promote Your Branch

One of the disadvantages of operating a franchise is that aside from the initial franchise fee, you will be paying ongoing fees.  

These regular payments are your contribution to a centralized marketing system. It’s meant to cover the costs of your franchisor’s nationwide marketing campaigns.  

Although marketing at the brand level can provide a significant advantage to the brand overall, it doesn’t necessarily raise awareness to your specific branch.  

To get more customers and become one of the successful franchisees, you will need to promote your branch in your area through local franchise SEO.  

Local franchise SEO is focused on improving the visibility of your branch in the search results. But, why exactly is it so crucial to appear there?

When your branch ranks high in the Google search engine results pages (SERPs), more people will see your business as reliable and recommended by Google.  

It also increases your business’ ability to generate leads and traffic, even if you don’t have a website.  

Yep, even without a website, your branch can still rank on Google. How? By enlisting and claiming your business on Google My Business and Maps!

So, aside from running branch-specific discounts and social media contests, make sure you invest in franchise SEO too!

4. You Are Answerable to Someone Else

Even though you’re the boss in your branch and are responsible for the running and profitability of the business, the franchisor is still the ultimate boss. He or she has absolute control over your business.  

If you struggle accepting this and want freedom in running your business, the franchise model may not be right for you.

The most successful franchises are branches that comply and remain consistent with the brand.  

5. It Will Grow on You

Despite all the struggle, operating a franchise will soon grow on you, and you will love it!

When you start seeing more customers patronize your branch, you will discover that the franchise model gives you the flexibility that other business ventures cannot.

Once everything is set in your business, you can delegate managing your branch to someone you trust. You now have the freedom to expand, invest in another franchise, or retire.

What’s amazing about being a franchisee is that you will acquire skills that will help you become a better, more knowledgeable and stronger entrepreneur!  

You will soon discover that this is something you're passionate about. Your enthusiasm for entrepreneurship can be infectious, and you can use this to inspire others to embark on the same journey you did – take a risk and start a business.  

Take Your Franchise to The Next Level with Franchise SEO

Are you interested in operating a franchise? Develop a franchise SEO strategy to drive more traffic and generate leads to your branch! This way, you can make more sales and become profitable faster.  

The life of a franchisee is not a bed of roses but seeing your hard work come to fruition makes it worth it.  

At Digital Resource, our franchise SEO specialists and digital marketing experts will work with you to create a custom digital marketing plan that will put your branch ahead of your competitors.  

Want to secure more customers online? Contact us today!  

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