Franchise business or franchise is a business that interests not a few people, especially beginners who want to learn business. Why is it that the target of this business on average is beginners? One reason is that it is easy to operate, not only that, even this type of business is more comfortable to promote because on average there are not a few people who hear it.
In general, perhaps this franchise business seems easy. A beginner in this field of business needs to assess, which franchise will be chosen, then start working on investment for the business, and wait for the profits to come to him. As a beginner who wants to try a Franchise business, of course you have to be careful when you have to work on investment in this type of business, after all, if the funds for the financing come from loan funds or joint funds that in the future will have greater responsibility because they have to be replaced.
If it happens like that, surely you should be more careful in investing money for this franchise business because not a few of all beginners invest all of their money in the franchise business, but soon suffer losses. This happened because the beginner who picked up this decision too quickly picked up the resolution, and did not have time to take into account the worst risks that can occur when suddenly the franchise business must lose money.
Not only that, there are still not a few mistakes that are often carried out by all franchise businesses. For something similar to not happen to you, this is these nine mistakes in running a franchise business that should be avoided:
# Borrowing Money Without Thinking of Possible Profit and Loss Business
Sometimes in running a franchise business, it requires a large amount of money for the growth of its business. Franchise business owners do not all have large amounts of funds in their pockets. Most of them will borrow funds from certain parties or financial institutions. But, what is feared is, when there is a jumbo loan of funds from other parties, it turns out that the Franchise business that is run feels a loss. Of course, this business will be a big problem as the owner of this business.
# Incorrectly Choosing a Business Partner
The next mistake that is often carried out by Franchisors or franchise business people is that they are not right in choosing business partners. We recommend that we want a business partner who has empirical knowledge in the same field, or it is terrible for your business partner to understand the franchise business that is being run, this is the risk. So that when something goes wrong, the partner can help solve our problem, not just add difficulties in a business that is run, or even leave us when there are issues in the business being run.
# Too Soon to Open a New Franchise Branch
This will be very exciting for Franchise business owners, that is, when finally, a similar Franchise business opens branches again in other regions or locations. Usually, the size of a successful franchise business can be assessed by increasing new branches in specific situations.
But you should not be wrong, and if the owner and management of this franchise business are not ready for the growth of a new branch, this business might cause harm to him. With more and less new offices being opened, regular control by the owner must not be infrequently done. It’s best to adjust to your skills and management, before opening a new franchise branch.
# Not Enough Franchise Business Experience
This is also very urgent in starting a business franchise. You should not ask a bit of a mentor, or someone who first runs this kind of business and success and success. The lack of empirical issues related to this business can also create this bland business, and perhaps it cannot last long. Take practice from all mentors, and often they will give the best input to run.
# Providing HR and SOP Training that is not yet mature
As the owner of a Franchise business, we try to deliver quite often HR training and SOP to all employees. But, it must not be wrong, not only employees who need practice, but you also need to not learn a little about HR and SOP. This is necessary so that you can submit training in times that are quite often for employees.
# Offering Unproven Concepts
Sometimes, after this franchise business is run by people who are chosen to run it, then this type of business will last quite a long time, even wanting to be stable every year. We recommend that as owners, we also should not concentrate too much on developing a franchise business, but also concentrate on companies that have been created before. Don’t offer a new and unproven concept, and only interferes with the concentration of different businesses that are running.
# Does not have Operational Fund Support
Franchise businesses do not have sizeable operational funding support. Funds owned by the owner Franchise are often in the form of funds from investors. The rest of the money obtained is funds from some franchisees who participated in opening the franchise business. The mistake that occurred was that there was no reserve of private funds that should be owned by the owner of a franchise, for operational work.
# Less Effective Communication between Franchisors and Franchisees
The relationship between the Franchisor as the owner of the Franchise business and even partners who run similar transactions should be able to run it well. Indeed, sometimes there are also situations where one partner has a distant place with the Franchisor, which creates limited communication. Because of the activities of each party, to the extent that they did not have time to submit information about the development of the franchise business being run.
# Doesn’t Have a Support System in Each Region
The support system here is the same as managers in each franchise branch in each region. When between branches have problems and constraints, surely they need help from managers who can help solve problems that occur between the franchise branches. Do not let the cause of this lack of support, not a few chapters of the Franchise will finally conclude the partnership is on the way because they did not get help.
Learn More in our Business
A franchise business that seems effortless; it turns out can contain risks when errors occur due to many factors above. We recommend that we learn correctly about managing this business if you are a franchise businessman. For you beginners who want to start a business with a franchise system, you can also learn from our seasoned mentors in this field. It is essential to do this to avoid mistakes that are as pronounced above.