Here’s what you need to know before jumping into that franchise business.
Getting into the world of franchising can be an intimidating task, with hundreds of brands to choose from and where each industry is as varied as the next. On the other hand, this business opportunity can also be a new and thrilling experience for a would-be franchisee.To ensure you’re on the right track, it’s important to establish a good relationship with your franchisor. Here are some things to keep in mind before committing to a franchise.
Be on the same page. Each company starts out differently, with its founders envisioning what they want their company to be. This vision guides them towards like-minded individuals in pursuing the same goals.
Rey Jimenez, senior manager for marketing communications at SEAOIL Philippines, talks about the company’s President and CEO, Francis Yu: “He started as a supplier for the business. And then when he saw an opportunity to put up a gasoline station after the deregulation of the oil industry in 1996, SEAOIL became the first gasoline station outside of the big three.”
And what does SEAOIL look for in potential franchisees? “We’re looking for someone [who has] the mindset of the owners, who has that entrepreneurial spirit of never giving up and has that passion to provide Filipinos with that good quality service and the products that we offer,” relates Jimenez.
Determine if it’s a good fit. Some franchisors like to keep things tight and neat, while others give you freedom to do things your own way.
“We’re licensing, really,” says Robbie Antonio, a real estate developer who is also the founder and CEO of Revolution. (Revolution is a company that specializes in prefabricated structures for homes and commercial spaces.) “We give [our franchisees] the concept and flexibility thereof. We give them a handbook, but as much as possible, we want to give them the flexibility to actually earn fast and recover fast.”
Matching your philosophy of management with that of the company you are partnering with can ensure a smooth working relationship. Understanding things from the perspective of how your franchisor sees you also lets you adjust to their expectations.
Know the requirements. Knowing what a franchisor is looking for and determining if you can supply it is a big step towards being a part of that franchise.
“Ang number one na hinihingi namin sa franchisee is a perfect location,” says Samuel Trinidad, a franchise consultant of Master Siomai, a popular dimsum stall which now has over 950 outlets across the country. Foot traffic, security, and presentation are some factors that contribute to what his company considers a “perfect location.” According to Trinidad, around 70 percent of franchise applications are rejected by his company if they think there’s a chance of them not succeeding. In other words, knowing what your franchisor’s specific requirements are and being able to provide these is key to a successful business partnership.
Establish trust and openness. “I think the secret to [maintaining the relationship] is being open and honest to [our franchisees],” adds Jimenez, “and offering the right products and services to them. We don’t offer something that we don’t like.”
Ultimately, the success of a franchisee-franchisor relationship relies on mutual trust; and once this kind of relationship has been established, success in a franchised business follows.
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