Fostering Entrepreneurship – Running a Franchise [opinion]

TODAY’S discussion is inspired by a discussion I had yesterday with professors and students at the University of Puerto Rico (in the Caribbean).

A franchise is a right given to an individual or a group to market an existing company. Popular franchises you might know include Wimpy, McDonald’s and Subway.

Generally when we speak of franchises we associate them only with fast food chains, but it is important to alert you at this point in time franchise organizations also include the automotive industry and cleaning and maintenance to name just a few.

If you choose to buy a franchise you will be called a franchisee, and the person from whom you buy the business will be the franchisor.

It will be challenging at times for some Namibians to follow rules, but as a franchisee you will be required to follow certain rules and procedures established by the franchisor.

People who like to run their own business usually want a certain degree of freedom to make decisions and call the shots.

As a franchisee although you run your own business, you have to follow ‘clear-cut procedures’ and run the business by the book.

These rules include, but are not limited to how to slice the bread rolls in a fast food restaurant or how fast an oil change must be completed at an auto shop.

If you are someone who likes to gives orders to others, but are not receptive to following them, then going into a franchise business is probably not aisable.

In addition you will be required to pay an ongoing royalty fee, as well as an upfront, one-time franchisee fee to the franchisor. Franchising has become a very popular way of doing business, even in Southern Africa.

I would like to take you through some realistic expectations you must have as a new franchisee.

Once you take the big step to venture into franchising, expect to be anxious as it is a huge step and a new, perhaps an exciting life which awaits you.

In fact you might be one step closer to the pot of gold. As you prepare to open up your new business, it could be a little bit stressful, but remain calm.

There will no significant surprises, as you will have an “operations manual” as to how you are expected to run your business.

There will be times where you might feel that you do not receive the promised level of support from the franchisor, so be assertive and insist on receiving it.

The franchisor will usually offer you an initial training programme, where you can observe, learn and ask questions.

Be ready to lead by example as building up a new business is hard work and a franchise is no exception.

Unless you really love the brand, you will find it is very hard going.

Show pride, because your employees need to feel and understand that you know what you are doing.

Customer service excellence, enthusiasm and pride are must to run a successful franchise. Remember to behave like a franchisee, although you own the business you cannot run it the way you please. If you are confident that you have developed new ways of running your business, inform the head office.

They can test your ideas and inform them across the board. This is probably something you have to accept to live with. Ethical behavior is non-negotiable as an owner of business.

If you feel that you don’t like something, try to negotiate a solution – “but don’t opt for a back door solution.”

For instance, don’t even think of buying goods from unauthorized sources. The franchisor will eventually find out and might not just be displeased with you.

Buying a franchise can offer the benefit of working with an established clientele.

You will also save a lot of time, rather than starting your business from scratch. Since the franchise company has an established business model in place, you will be able to focus on running your own business.

Finally take a clear-eyed look at yourself to identify your true strengths, talents and limitations. If you are an outdoors person, then a yard care franchise might be for you rather then running a retail store.

Think about your personal habits, your daily schedule and how you would like your day to be. Are you a people-oriented person, numbers cruncher or more a hands on practical person?

Match your own temperament and talent with the type of franchise you want to undertake.

Dr Wilfred Isak April is a Unam graduate. He holds a PhD (Entrepreneurship) from New Zealand and lectures in Entrepreneurship, Leadership Development and Organizational Behaviour at the University of Namibia.

Source : New Era