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Things to consider when opening a franchise

Julianne Leybag
02 April 2018 2 minute readShare
Business, puzzle

Preparation is necessary for success—including starting a franchise venture. Franchisees must be able to understand their roles and responsibilities as a individuals  starting and running their own franchise unit. Here’s what you need to know when opening a franchise.

Starting a successful franchise unit takes more than guts and nerves. It requires pragmatism, a sound business acumen, and the fundamentals are listed below.

Financial responsibilities

Being able to provide stable financial support is the primary responsibility of a business franchisee.

Of course, franchisees have to make sure that they have sufficient financial resources to effectively open and run their own franchise unit. This includes the initial franchise fee and set-up payment, the retail space lease fee, and the cost of equipment, marketing, and support materials from the franchisor.

Unlike outside investors, this isn’t where the franchisee's responsibilities end. Franchisees can’t afford to be mere passive investors while letting franchise managers run their own outlet/unit.  There are other specific financial requirements, including tax and other auxiliary expenses, that are needed to be taken into consideration.

Time and resources

Aside from ensuring financial capability, franchisees also need to be present and take on a proactive role in the administration and operation of their franchise unit, especially in its infancy.

Franchisees must aim to not just effectively start their business but also look for more development opportunities. The franchise will require time, attention, smarts, and business acumen to not only gain traction but also establish a solid and reliable market niche within the specific territory.

Networks and partnerships

The franchise unit/outlet is an organ in the intricate system that is the entire franchise company—the national or international brand.

It is therefore logical and very necessary for franchisees to maintain constant and open communication among fellow franchisees as well as the national/international brand. This is to ensure uniformity is reflected in each of the products/services offered by every franchise outlet/unit regardless of location or territory.

When franchisees are open and collaborative, opportunities for business development can be opened and harnessed.

When franchisees keep an open line of communication with their franchisor, business practices get regularly evaluated and results in the promotion and constant upgrade of best business practices. These contribute to the overall progress of the national/international brand thus maximising the franchise unit’s profitability and opportunities for financial success.

Administrative and operational standards

One of the most critical responsibilities of a franchisee is ensuring that the franchise unit only adopts the best administrative and operational practices. This means taking on a proactive role in selecting the best people to work with—from the franchise manager to service personnel—and implementing the best training program provided by your franchisor—on all your employees.


Lastly, franchisees need to bear in mind that once they decide to finally get into a franchise, they must also be open to the reality of wearing many hats and taking on risks and facing challenges.

Initially, franchisees may be required to manage the franchise unit’s daily operations including ordering supplies, preparing payroll, meeting with customers, and other necessary work, until such time that they are able to hire people for these roles.

Aside from financial success and profitability, what defines the success of a franchisee is whether they love what they’re doing.

Of course, franchisees should be realistic and sometimes be cunning in their business decisions just to ensure the growth of their business. But this doesn’t mean that business owners are not allowed to have a bit of fun.

Things to consider when opening a franchise
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Julianne Leybag

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