You have expectations of the franchise business opportunities you’re considering, and you’ll use those expectations to choose the best option for your needs. Have you thought about the other side of that coin?
Franchisors also have expectations of their franchisees. Different companies have different expectations, and they use different metrics. Making sure the business you choose is a good fit for you in terms of their definition and measurement of success is a good plan.
Picking a franchisor based on their system of measurement will help you avoid stress and financial distress down the line. If you fail to meet benchmarks consistently, it can spell the end of your franchise. When you choose a franchise, you’re signing up for a proven method of success but also for an analysis of your progress. While you’re still your own boss, you will have to answer to your franchisor’s expectations and meet Key Performance Indicators (KPI) or benchmarks.
Different franchisors measure different things when it comes to the success of their franchisees. The point is always to make sure the franchisee is on track to be successful and isn’t performing poorly.
The only way to find out how a franchisor measures success is to ask the franchisor and existing franchisees, as it’s not generally part of the Franchise Disclosure Document (FDD). What is in the FDD that’s important to think about in terms of benchmarks is contained in Item 17: Renewal, Termination, Repurchase, Modification and/or Transfer of the Franchise Agreement, and Dispute Resolution.
There is a wide range of things that can happen if a franchisor isn’t happy with your progress. The franchisor could modify your territory if you’re underserving customers, buy your franchise from you, or even give your franchise to someone else. The worst case scenario is that they pull the plug on your franchise and you’re stuck empty handed and possibly with quite a bit of debt. The best scenario is that the franchisor works with you to improve your franchise. Ideally, franchisors will want to protect their investment of time into their franchisees and will help you improve and give you to the time to do so.
But don’t think having your success measured by someone else will mean the demise of your franchise. Having someone check in on your trouble areas often can be useful – that accountability can help you to meet your own goals as a businessperson, especially if the franchisor is good at helping you improve and build on their investment. Sharing goals with your franchisor can help make your assessments more useful.
Take BodyBrite as an example. Their mission is to “Let Your Beauty Shine” for both their customers and their franchisees. As a customer, you’d want services to let your physical beauty shine at an attainable price, which is what BodyBrite offers their customers through a single price point laser hair removal service. But for franchisees, BodyBrite wants franchisees to shine beautifully in owning a successful business. If you’re looking to help customers let their beauty shine while owning your own business, BodyBrite is a franchise you should consider because it meets your expectations for yourself. You’ll find that if you’re not meeting your goals of helping customers feel beautiful, BodyBrite’s assessments will help you get closer to that goal.
Choosing a franchise with a mission you can support and metrics you can work within will increase your chances of happiness in your franchise business. As always, knowing what you want out of life and taking a deep assessment of what’s important to you will help you become a successful and happy franchisee.