Learn the roles and responsibilities of a franchisee, how the franchisor-franchisee relationship works, and the skills you’ll need to be a successful franchise owner.
Owning a Franchise: What It Takes
Franchising is a popular way for entrepreneurs to own a business and be their own boss while benefiting from the experience and support of an established brand. Owning a franchise can be simpler than starting a business from scratch because brands most often have already created policies and procedures to follow. That doesn’t mean it’s a cakewalk. It’s an investment of time, money, and effort.
Before you dive in, make sure you meet the franchisor’s financial requirements: this is the designated net worth and cash you have available for the investment. Franchise fees vary depending on the brand. Plus, you’ll need working capital funds to cover ongoing expenses. Understand the franchisor’s financial requirements and have a plan for financing your business including construction costs and working capital.
There are certain skills needed to own a thriving franchise business. Let’s explore a few:
- Management skills: As a franchise business owner, you’ll be responsible for developing a culture, managing and leading your team, requiring strong interpersonal skills, effective communication, and the ability to motivate and inspire. You’ll be making decisions, problem solving, and delegating tasks and responsibilities so that you can focus on the big picture.
- Marketing skills: One of the benefits of a franchise is established brand recognition and a marketing plan that helps the entire franchise system. However, you’ll need to be active in driving traffic and sales to your location and building a loyal customer base. You can’t just rely on the brand recognition of the franchisor.
- Operational skills: You’ll be responsible for the day-to-day operations, staffing, training, ordering inventory, managing payroll, and maintaining your location. You and your team should also be comfortable using technology and adapting to new systems and processes.
- Financial skills. If you do not have an intimate understanding of an income statement and balance sheet, you could put yourself at a competitive disadvantage. You are investing to maximize your return on that investment, and the more you understand an income statement and how to drive sales through marketing and control costs through operations, the better your chances of achieving your financial goals.
Your Role as Franchisee
Depending on the franchise you buy, owning a franchise can be a hands-on, daily, and engaging process. Here are a few franchisee responsibilities you might expect:
- Oversee employees and operations: Hire, train, and supervise employees, ensuring they provide high-quality and consistent service to your customers. Oversee day-to-day operations, making sure all is running smoothly and efficiently. Handle any customer complaints or issues that may arise.
- Follow the system: A major benefit of owning a franchise is the franchise system established by the franchisor; franchisees are required to operate their business in accordance with the franchisor’s guidelines. Franchisors spend years developing a streamlined system. Follow the business model, operational procedures, and brand standards.
- Build customer relationships: Provide excellent customer service and create a positive consumer experience to establish a loyal customer base. Earning repeat business involves greeting customers and ensuring their satisfaction. Your employees should provide the same level of customer service and satisfaction.
The Franchisor-Franchisee Relationship: What It’s All About
The franchisor-franchisee relationship is unique. The franchisor provides the business model and support needed to operate the franchise. The franchisee operates the franchise in accordance with brand guidelines. The relationship is built on trust, collaboration, and striving to achieve shared goals.
The franchisor provides ongoing support to the franchisee in several ways, including training and education programs, operational support, and marketing and advertising resources. The franchisee provides feedback on the business model and supports the franchisor’s marketing efforts. The franchisee also complies with the franchise agreement and maintains the brand standards.
When evaluating a franchise business opportunity, you’ll want to keep these dynamics in mind. Because the relationship is so important to achieving shared goals, it’s essential to work with a brand whose culture and message match your goals and values.
How to Become a Franchise Owner with Penn Station
At Penn Station East Coast Subs, we’re known for our quality products and service, and we are proud of the high quality of our franchisee relationships. We’re expanding our brand across the U.S. with development territories available for multi-unit investors who are passionate about our sandwich franchise.
Prospective franchisees need a net worth of $500,000 and a minimum liquidity of $300,000. We outline franchisee responsibilities in detail in our FDD, and we support franchisees with IT and online ordering, operations and training, marketing, site selection, and financial reporting.. Request information today to learn more.
The offer of a franchise can only be made through the delivery of a Franchise Disclosure Document. Certain jurisdictions require registration prior to the offer or sale of a franchise. We only offer franchises in jurisdictions where we are registered or are exempt from registration. Penn Station, Inc. 1226 US Highway 50, Milford, OH 45150. Penn-Station.com