Franchisee Success: 5 Tips for New Franchise Owners

Franchisee Success: Five Tips for New Franchise Owners

What makes a franchise prosper? Read our tips for franchisee success, so you can build a profitable business that thrives.

How Successful Are Franchises?

AdvisorSmith finds that less than 80% of start-up independent businesses make it past the first year, and less than 70% make it past the second year. Compare that to FranNet’s study, which found that 92% of franchise placements were open after two years. The numbers get even more impactful beyond those years. The independent small business success rate was 50% after five years, while the franchise placement success rate was 85%

Scissors & Scotch reported a 0% franchise failure rate over the last three years, meaning we had no terminations and no stopped operations. Of course, we can’t guarantee or predict any outcomes, but this statistic does demonstrate our recent history of success.

Traits of a Successful Franchisee

Whether you’re new to entrepreneurship or an experienced business owner, working with a well-established franchise brand that provides support can allow you to blossom as a franchisee. The following five traits are commonly shared by the most successful franchisees:

Resiliency: As a business owner, you’ll be tested in ways you never imagined, whether within a franchise or not. Critics will come at you from all directions. Your patience will run thin with employees and customers. You’ll need to dig deep and push through to reach your goals. When times are challenging, your ability to push through, your “grit”, will be your key to success, and as part of a franchise, you can lean on your fellow franchisees to see how they thrived in similar situations.

Financial literacy: Franchise Direct recommends that if financials aren’t your strength, team up with a partner or trusted consultant with a solid financial literacy base. Your franchise system should help and guide you, working with you to help you have an understanding of financials like credit, capital management, financial statements, and reporting. The better you understand how every aspect of finance works and affects your profit, the more you’ll be able to catch errors and reduce expenses quicker. Working with your franchisor and fellow franchisees, you get invaluable access to benchmarks and key measures to look for.

Humility: Don’t let your ego get in the way of finding success with a franchise. As an entrepreneur, part of your nature is to make your own path and buck the systems. Remember, a franchise is a proven system. Be willing to learn, take direction, and follow the franchisor’s plan.

Strong work ethic: This starts in the research process before even choosing a franchise. Ask the bold questions and put in the work to know what you’re getting into. Being an entrepreneur can be incredibly rewarding, but like anything worth doing it takes hard work. As an entrepreneur, you’ll want to analyze and then take calculated risks to create momentum and success. As part of a franchise system, you’re working with folks who have worked to identify and eliminate those risks.

Perspective: Perspective is all about stepping back and creating a realistic vision and goals for your franchise. It means recognizing when you’re responding with your emotions instead of logic and then shifting your mindset. Your fellow franchisees can help you validate those goals. You just have to make sure to have patience when needed and take necessary actions.

Five Tips to Find Franchisee Success

Follow these steps to flourish as a franchisee:

Step 1: Pick the right franchise
Determine a franchise’s success rate and how strongly they’ve endured different economic climates. Forbes finds that some franchises have as high as 90% failure rates, while others have almost no failures. While that’s not a predictor of your own potential success or failure, it does tell you a lot about how the company operates and whether you want to work with them.

Step 2: Talk with an attorney before singing a contract
When investing tens of thousands of dollars, ignorance is not bliss; it’s a potential nightmare. Share your contract with a franchisee attorney to ensure you understand everything you’re getting into for the next 10 to 20 years.

Step 3: Talk to other franchisees
Spend time with franchisees in the franchise business you’re considering. Ask them if they have any complaints and what you should expect. This step, known as validation, allows you to connect directly with franchisees who are free to share any information they want and gives you a realistic snapshot of the franchise experience.

Step 4: Market yourself
While you will pay into a national advertising fund, you can often do local advertising and social media marketing with the franchisor’s approval. Community involvement is another way to get your name out. Sponsor a local sports team, participate in charity events, or hold educational seminars. The U.S. Small Business Administration says the trick is always to be doing something that reminds people of what your business does, where it’s located, and how it can serve their needs.

Step 5: Use the system to your benefit
You’re investing in a franchise for a reason; follow and leverage every component of that system to find your best chance of success.

Success Starts with Scissors & Scotch

If you’re ready to start your journey to franchise ownership, all it takes is a few steps with Scissors & Scotch to become the next badass franchisee. We are the premier upscale men’s barbershop business, and we’re growing exponentially by finding the right people who can share our core values. By joining Scissors & Scotch, you’ll receive the playbook and a team of people committed to building business the right way. With your key five traits and a network of support, you’ll be ready to build your business. So, take 10 minutes today, fill out our form and get started joining the Scissors & Scotch team.