Looking to get into the restaurant industry but not sure if you should be considering franchising or operate as an independent? South Africa has more than 31,050 franchises, employs more than 323,519 people and generates a turnover in excess of R302 billion. A franchise is not a guarantee of success, but statistics show that franchise-owned businesses have a better chance of succeeding over an extended period in comparison to small independents.
Before becoming a franchisee, ask yourself the following questions:
Is This the Right Opportunity for Me?
Franchising may not be suitable for everyone. For some, it offers the chance to venture out and become their own boss while enjoying the safety net provided by a franchisor. As a franchisee, you will be the boss but still accountable to the franchisor. Others view franchising as an avenue to earn additional income. Seasonal franchising, in particular, allows for more flexible working hours, with intensive work during peak periods and reduced hours during quieter times. By investing in a franchise, you opt for a tried and tested business model that has proven to be successful.
How Hard Am I Willing to Work?
The answer should be, “As hard as it takes.” Entering with the expectation of coasting will lead to quick failure. To succeed, you must be prepared to invest long hours and demonstrate perseverance. Established franchisors typically provide a system designed to support your success. However, if you choose a lesser-known franchise, you’ll need to double your motivation and physical investment compared to a more established franchise. Building a solid foundation is crucial for withstanding future challenges, and brand recognition will follow with time. While there is no foolproof recipe for success, the hard work you put in from the beginning will ultimately pay off.
What Are the Risks?
Starting any new business involves a degree of fear and risk. Franchising is generally considered less risky, but there is still a significant financial risk. It’s important to note that starting a franchise is not cheap, with the initial fee often being substantial. This fee covers the rights to use the franchisor’s signage and logo, as well as access to lower-priced products and services negotiated by the franchisor. Additionally, expect ongoing royalty fees, usually payable annually. Each franchise has a unique fee structure, ranging from a percentage of total sales to a combination of a lower percentage and a fixed amount.
Who Will Train My Employees?
As a franchisee, training your employees will be your responsibility. However, don’t panic—most franchisors offer a comprehensive training plan. Use the franchisor’s established plan as a foundation and customize it to fit your needs. Remember, franchisors have a vested interest in your success and want to see you thrive. Once you finalize your training plan, implement it to ensure your employees represent your business effectively. They will be the face of your operation, and starting off on the right foot is crucial.
While entering into a franchise does not guarantee success, taking specific steps can increase your chances in the franchise world. Hard work, a well-defined business strategy, thorough research, and effective training are key elements that will set your franchise on the path to success.