Starting a franchise can be an exciting venture that offers the promise of entrepreneurship. New franchisees often trade a full-time job with a guaranteed salary, for the opportunity to be their own boss. They enter a world where new franchisee challenges are very real. Paychecks aren’t guaranteed, and despite being independent business owners they are expected to follow the franchisor’s guidelines to the letter. In many cases, significant personal savings and bank loans are invested in purchasing the franchise.
To help optimise the success of a new franchisee especially in their first year its important for franchisors to understand and embrace the challenges faced by new franchisees. It’s crucial for franchisors to implement a robust change management program to support their success.
Some of the Real Challenges Faced by New Franchisees
- Financial Uncertainty: Leaving a salaried job to enter the world of franchising can be financially daunting. New franchisees face the risk of inconsistent income, making it challenging to maintain their previous lifestyle. A robust change management program can help them navigate this uncertainty and plan for financial instability.
- Loss of Autonomy: Many franchisees were previously in roles with authority and decision-making responsibilities. Joining a franchise often means following established operational guidelines, which can be a significant adjustment. Even though they will have joined a franchise because of the known advantages of an established business format, new franchisees may find this loss of autonomy frustrating.
- Initial Investment: New franchisees often invest a substantial portion of their savings and will also take out bank loans to acquire the franchise. The financial pressure and risk of not recouping their investment can be a constant worry.
- Learning Curve: Adhering to the franchisor’s rules and systems can be complex, especially if the franchisee is not familiar with the industry they have entered. A lack of training and support can lead to mistakes and inefficiencies, resulting in frustration and a breakdown of trust.
- Market Competition: New franchisees may have to compete with established businesses in the area, making it challenging to build a customer base. A well thought out, implemented and managed change management program can help franchisees adapt and stand out in a competitive market.
- Personal Relationship stresses: Very often new franchisees are ‘one half of a couple’. The strain of longer working hours, financial uncertainty and not meeting initial expectations can lead to very real difficulties within family relationships. If everyone is aware of the likely challenges and given strategies to cope with them, the stress on personal relations can be significantly lessened.
The Advantages of a Robust Change Management Program for Franchisors
New franchisees go through massive change within their lives. Understanding the challenges which they go through at the very beginning of their franchise journey helps franchisors develop a robust program to test, check and mitigate any difficulties.
- Franchisee Success: A well-designed change management program can help new franchisees adapt to their new roles more quickly and effectively. This success translates to the success of the franchise as a whole.
- Consistency: Franchisors maintain the brand’s consistency and reputation by ensuring all franchisees follow the same operational guidelines. This consistency is crucial for building trust with customers.
- Risk Mitigation: New franchisees are less likely to make costly mistakes when they are properly trained and supported. A change management program can reduce the risk of financial losses.
- Brand Growth: Successful franchisees can be instrumental in expanding the brand’s presence. When franchisees are well-prepared, they are more likely to open additional units or recommend the franchise to others.
- Improved Collaboration: A change management program promotes a collaborative relationship between franchisors and franchisees. Clear communication and support can lead to a more harmonious working relationship.
Change Management requires well trained team members to deliver a successful programme. Initial investment utilising the services of a specialist practitioner will help ensure all the necessary details are appropriately covered and trained to the people responsible for delivery within the franchisor leadership.
Getting It Right Leads to a Thriving System
The journey of a new franchisee can be fraught with challenges. Franchisors can play a significant role in easing their transition by implementing a robust change management program. Such a program supports franchisees in overcoming obstacles and also benefits franchisors, optimsing the success of their brand. The success of franchisees is a testament to the strength and effectiveness of the franchisor-franchisee relationship. Ultimately this leads to a thriving and expanding franchise system.
Tim Morris – Founder of Pinnacle |Â Franchisee Growth Experts