QUESTION: I am considering investing in a franchise, but am somewhat in awe of the many details I must deal with on a day to day basis. My strengths are in sales and marketing, but I have little experience in bookkeeping, record keeping, taxes, insurance, etc. What are my options?
ANSWER: Many entrepreneurs face these problems. We all have strengths and weaknesses and a wise man knows what he doesn’t know. You can, of course, learn the hard way through trial and error or you can reach out to others who have the necessary expertise.
A franchisor will typically offer the following assistance to a franchisee:
- Financial assistance: Not all franchisors offer financial assistance but some do have financing programs available to franchisees.
- Location selection: Some franchisors will help franchisees select a location for their franchise or they may select the location. The benefit of the franchisor selecting the location is that they have experience choosing locations that are successful.
- Training/operations manual: In order to run your business the franchisor provides a detailed operations manual that includes instructions for carrying out their operating system. It establishes the rules, standards and specifications of the franchise and forces the franchisor to organize and define specific job responsibilities and tasks. Before you can open your franchise you may need intensive training about the operating system and business as a whole. Most franchisors offer periodic training and seminars.
- Advertising: Most franchisors initiate advertising efforts, either on a national or local level or both. Some franchisors require franchisees to pay into a fund to cover these costs or will offer a co-op arrangement where the costs are split.
- Support: Most franchisors offer ongoing support such administrative (e.g., human resources and accounting) and/or technical support. Many large franchisors have hotlines that franchisees can call for support. Franchisors can advise on employee issues, insurance requirements and other matters relating to the operation of your franchise.
NOTE: The franchisor is obligated to provide you with only the support and services provided for in the development and franchise agreements that you sign. The franchisee is expected to conduct a due diligence of the franchise opportunity supported by legal and other professionals; and you have an opportunity to either negotiate changes or decide not enter into the relationship. You should never expect more support than what is contained in the written agreements, and it is important before you sign any franchise agreement to read it and make sure you understand what support you will be provided.
Gray Poehler is a volunteer with the Naples Chapter of SCORE. To learn more about management issues facing your small business, contact SCORE Naples. Counseling is provided FREE of charge to all U.S. citizens and legal aliens. To register call 239-430-0081 or visit our web site http://naples.score.org/mentors. A counselor will contact you within 48 hours. Please include your name, email address and a contact phone number.