You have decided to set up an organic food store franchise. You even know which franchise you want to work with. But, before you sign any documents, you may want to read our article below. Certain mistakes are avoidable, but most people do not take the time to make the right decision. Let us take a look at the common mistakes people make, and how you can avoid them.
Not having a good understanding of the franchise.
Many people think that getting into a franchise is a sure key to business success. And yes, franchise’s offer fantastic opportunities, especially for the established brand. You will find that people who are looking for a franchise will run to the larger companies while ignoring the smaller ones.
The reality is that the small ones could be performing very well. The smaller ones may also be able to give you better support because they may not have too many franchise owners on board. Have a good understanding of the franchise and choose the one that will provide you with maximum benefits.
· Ignoring Market Research
There is a lot of research you need to do around organic food stores and the right franchise. It is a stringent industry, and wherever you work with must adhere to the industry regulations. It would be terrible for you if you sign on, part with your hard-earned money, but not be able to operate because of infractions from the mother company.
Do your investigation thoroughly. Talk to those who are signed on to them so that you can know what to expect. In doing your research, give yourself a list of not less than five franchises that you can approach for a possible partnership. Have a healthy mix of top middle and low performers so that you have a good overall view.
· Not Paying Attention to the Financial Aspects
When you start an organic food business, do not think you will make profits overnight. It does not matter how fantastic the franchise you are joining is. There is that initial period when there will not be enough money coming in. You, therefore, need to have enough money set aside to cover you for at least one and a half years.
Think about having a back-up plan for capital. When setting up you may underestimate some costs, and you will find that the money is leaving faster than it is coming in.
· Rushing Your Decisions
Entering into a franchise for your organic food store is something that needs time and patience before making the decision. Arm yourself with sufficient knowledge and have a good understanding of whether you will be able to make money. That is why we cannot emphasize enough the importance of market research. You also need clarity on the earning potential of the franchise. Look at the figures, have income projections, and talk to other people in the organic foods franchise.
You must also engage the services of a lawyer who understands the franchise business. You need someone to walk you through the Franchise Disclosure Documents as well as the contracts. They will point out any red flags, as well as give you excellent advice on how to negotiate better terms for your business.
· Lack of a Business Plan
Yes, you have a good product, and you have partnered with the right franchise; however, you still need to have a business plan. A business plan will highlight everything you intend to do in your business. It will show your goals, finance, timelines, and marketing strategy, among others. It helps you keep track of the company while allowing you to make the necessary changes when the need arises.
· Not Having the Right Financing
You will need money to get into a franchise, and if you do not have a plan in place, you will not succeed. You may, for example, sign onto a franchise that is not right for your business. Timing is crucial; otherwise, you could lose an excellent opportunity. That is why we go back to our point above that you need to have a good business plan. You have several options with regard to financing, including personal savings, borrowing from friends and family, or getting a loan.
Ignoring the Support, the Franchise Holders Offer You
If you partner with the right franchisor, they will give you support, especially in the initial stages of your operations. Remember, they have a lot of experience, and you will learn a lot from them. Some will even give you marketing collateral and advise. Develop relationships with other people who are in the business so that you can learn from them.
On the reverse side, some people enter into a franchise partnership and think that is it. The reality is you still have to get the customers walking in through the door. While you may benefit from the brand awareness the franchise holder has, you must have the relevant marketing strategy to bring in more customers. By joining the right networks, you get to learn from the other franchisees and avoid common mistakes that could land you in a lot of financial problems.
Setting up an organic food store franchise is a fantastic idea. You have the opportunity of having a big brand name to build your business. You, however, need to take the time to learn the industry properly, so that you avoid some of the mistakes we have highlighted above. Join the right networks, and learn from the successes and mistakes of the other franchisees. Also, take advantage of the support the franchise will give you. Remember, it is a partnership, and both parties are in it to make a profit. You can only do this if you run your business well.