Not all of us dream of owning our own business. For some investors, the better choice is to run a branch of someone else’s franchise, making you the “franchisee” and the business you want to be a part of the “franchisor.” Whether you want to be the proud franchisee of a BBQ franchise or a haircutting salon, you have to know how franchising works first.
Paying the franchise fee is the biggest step towards making this goal a reality. However, you have to know what you’re getting into before you pay it. You need to figure out what to research, what a franchising fee is in the first place, and how it relates to the business that you want to franchise.
Here’s a short guide to franchising fees for a BBQ franchise.
Know Your Own goals
The process of buying a franchise is a big one. Before you get started, you need to ask yourself if it’s the right move for you.
If you’re considering buying a new franchise, you’re probably looking to have more control over your future. As a franchisee, you will be buying the license to a brand, and that comes with a lot of power. It also comes with a lot of restrictions.
If you want to make your own rules and run your business your way, then you probably don’t want to be a franchisee. Remember, in order to make this work, your goals have to be aligned with the goals of your franchise.
Know your Own limitations
The fact is that most people make a crucial mistake when they first think about buying a franchise. They think they have enough money to do it and then they start researching the franchises that are available for them to buy.
They’re getting ahead of themselves.
The focus of your research at the early stage of buying a franchise should be research and reflection into what you’re capable of as an owner and franchisee. Without this genuine self-reflection, you could be setting yourself up for disaster. The franchise that you’d hoped would be your fortune might end up being your funeral.
Here’s an example of how this can go wrong.
Let’s say you’ve always wanted to own and operate a BBQ business. You research the BBQ franchises in your price range, and you go for it. Just because you love pork and restaurants doesn’t mean you know what it takes to franchise one.
Ask yourself: are you prepared to be a patient trainer of a whole team of employees? It will be part of your job to communicate the operating manual to them and get them on board with the company’s policies. Restaurants run on people and if you didn’t ask yourself beforehand how much of a people person you are, you could be setting yourself up for disaster.
The bottom line is that you must familiarize yourself with what you are capable of (and not capable of) so that you can compare those skills to the franchise’s expectations for you. You need to figure out if you’re the right person to make those expectations happen.
Be Comfortable with the Rules
Buying into a franchise, especially one of the top franchises, comes with a lot of rules. Sometimes, you’ll be buying into hundreds of pages of operating manuals that you’ll be responsible for following and using to train your employees.
If you’re not a detail or rule-oriented person, buying a franchise is probably not for you. These are the rules that dictate how franchises run not only as a whole but for their individual regions as well. You must be comfortable with being responsible for all this information.
Do the Proper Research
Once you know your own limitations and goals and are prepared to take on the responsibilities of a franchise’s operating manual, only then should you be researching which franchise is right for you to buy. As a person with a love of food and people, you may start looking into that dream of operating a BBQ franchise.
Of course, the franchising fee should not be confused with the total cost of buying the franchise. The franchising fee is just the money that it takes to get started with the basics. You’re essentially buying the right to use the franchise’s license and all the systems that they’ve built for themselves to operate as that franchise in that particular area.
Now that we’ve done all the research we need to do, it’s finally appropriate to ask: what exactly are you getting when you pay a franchising fee?
What You’re Buying
When you pay the franchising fee and sign the franchise agreement, you enter a contract with the franchise to operate their business the way they have laid out for you. This procedure is contained in the docket of things that you’re buying when you pay that fee, which can range from $10,000 for a fast-food chain to $100,000 for a top franchise (the average is around $35,000).
We already know about the operating manual. You also get access to their marketing procedures, business systems, and formal training. Anything in their business network is now a part of your network. Their brand is now essentially your brand too.
When you pay the franchise fee you are entering into a contract with a franchise to operate their business the way they tell you. You are also implying that you have done the research into how this particular business will function and the appropriate self-reflection necessary to know that you’re the right fit for it.
Buying a BBQ franchise is a big step that requires a lot of groundwork before paying the fee and a lot of diligence after the fact. However, if you’re the right person for the job, operating a franchise can be a life-changing chance for profit and success.
Just figure out if you are the right person before you make any big moves. After all the work you go through franchising a restaurant, you want to make sure it pays off like it should.