Imagine 35,000 fast food restaurants of the same brand, located in 98 countries. Impressive, right? Those numbers are truly ambitious. When we talk about franchises, we get into an exponential level of business, in which the roles and responsibilities of the person in charge are constant and inescapable. But if the work is done successfully, earnings multiply at the speed of light.
A franchise operates using standardized methods established by the creator of the idea, who gives the rights to replicate the concept, without altering it, to another. There are all kinds of franchises beyond the food industry, from beauty products to electronics.
“A franchise is a predefined, evolved concept already sold to the market, of which you can be a part without having to reinvent the wheel,” explained Jorge Aldarondo Pérez, Executive Vice President and Director of the Corporate Credit Division at Banco Popular.
When you acquire a franchise, you have to be clear that you are under a concept and regulations. For example, in the case of fast food chains, the franchisor (in other words, the owner of the concept) will tell you where to acquire food, what amounts to use for each dish and the amount of time in which you should serve the order. That’s why one of the fundamental attributes of a franchise is the consistency of its offerings, whether in San Juan or Tokyo, regardless of geographical location.
Are you interested in a franchise? Before diving in head first, learn what you need to manage one:
- You need to be extremely organized and responsive in your management to be able to maintain control of the operation. For example, you must produce earnings beyond expenses, promote employee efficiency, keep the site clean, and comply with quality standards, among other issues.
- You have to ensure that the type of franchise you want to acquire is in line with what you like to do. You should honestly evaluate whether it makes sense in the market (is there supply and demand?) and if it is located intelligently.
- You should have a full understanding of the contractual and logistical conditions of the franchise.
- It is essential to establish daily, weekly and monthly plans to meet individual goals and those established by the franchise.
- Finally, do you have financial support? Determine the initial investment you have to make with your capital and how much you need from a financial institution.
From day one, the franchise makes a market and traffic available, as the consumer already knows the product and actively seeks it, unlike a new business that has to go through a process of establishing a brand. Additionally, the franchisor will do everything possible to help you succeed, because your failure reflects on the brand’s reputation.
Finally, the franchise offers you the opportunity to open a location with a known brand and gain experience along the way. Now winning more customers and becoming the number one chain will depend on your business abilities.