7 Things to Do to Become a Great Franchisee

See also: What Is Franchising?

When starting a franchise, there are certain factors that every entrepreneur should consider. Careful planning and research will increase the chances of successfully starting a franchise business. There will also be certain things and skills required for you to make a great and successful franchisee.

The following are the seven things to do to increase the chance of running a profitable franchise.

Group of people meeting around a wooden table.

1. Increase Your Ability to Take Advice

Some people invest in a franchise because they think it’s easier than starting a business from scratch. Some people invest in a franchise because they think they want to be their own bosses and just let the pre-existing systems work out on their own. While getting into the franchise business gives you the opportunity to be your own boss, and is easier than starting everything on your own, it still requires hard work and attention. It is also not a good idea to ignore advice or recommendations from your franchisor. 

Even if you are already successful with other businesses you are managing, you should still be keeping your mind open and listen to people. Don’t forget that the franchisor has worked with many different franchisees before. They know and can give you valuable guidelines on what works and what doesn’t.

2. Look for Established Systems and Follow Them

There are many advantages to owning a franchise. One of the most considerable benefits of starting an affordable franchise business is that it is a well-established company readily available for you to utilize. Most franchises offer payroll, training, marketing, client services, and business support systems. The best franchises do not micromanage but offer assistance and independence.

Once you find an appealing franchise, seek opportunities to interview successful franchise owners or managers. A personal visit to a thriving franchise will allow you to ask direct questions and get honest answers. Bear in mind that once the franchise agreement is signed, it is difficult and expensive to terminate.

Group of people meeting arounf a white table

3. Review Franchise Laws

Franchisees may have to pay professional fees for financial functions, legal services and business licenses that ensure compliance with state regulations. They must also familiarize themselves with state and federal franchise laws. For example, in the US the Federal Trade Commission (FTC) and certain states have established legislation that formally regulates the buying and selling of franchises. Some states even regulate the legal relationship between the parent company and its franchisees.

Entrepreneurs who want to start a franchise should research their local regulatory requirements related to franchise agreements and dispute mediation processes to prevent disruption. Most US states and the FTC require that parent companies disclose certain pieces of information to franchisees before the franchise can be legally sold. These disclosures protect the franchisees, but are time consuming if the state requires franchisors to submit a copy in order for official approval before the sale.

4. Review the Quality of Training

The most overlooked, yet most important aspect of starting a franchise is the overall quality of training. The entire point of being a franchisee is to receive employee training and business support from the parent company. Training programs should equip supervisors and employees with the right sets of skills and knowledge to effectively do their jobs. As mentioned above, well-established franchise systems will provide employees with policies and procedures that are essential to maintain smooth and profitable business operations.

Ideally, the parent company will offer a proven, structured coaching program for owners. These mentoring programs allow experienced franchisers to transform new entrepreneurs into successful business professionals.

5. Analyze Real Market Opportunities

Sometimes, franchises will promise revenue and success regardless of the industry, market and geographic variables. It may be advertised as one of the best franchises to start, but there is no guarantee that it will work in your city. Credible market research will identify real opportunities and challenges. Primary market research data can be collected from consumer surveys and focus groups. While some people still conduct phone and in-person surveys, the easiest way is to use brief email questionnaires with short questions that will hold the respondents' attention.

Be sure to use questions with choices in sets, such as a number scale where respondents rank their answers. A marketing research firm will be able to set up a focus group project, which will allow observers to listen, take notes and ask questions.

6. Work with Numbers and Business Costs

Another one of the great advantages of franchising is lower overhead costs. When compared to independent businesses, there are lower overhead costs because the franchisee can take advantage of the parent company’s regional or nationwide marketing and distribution systems. Thus, franchisees enjoy low-cost bulk purchasing and consistent product supply.

However, starting and maintaining the franchise is definitely not cheap. There is the initial franchise fee, which is the price of using the franchiser's brand and business system, and training costs, which may be related to travel, hotel and living expenses in a different state. There are obvious property improvement and building renovation costs, but sometimes hidden real estate costs such as land or leasing fees. Some franchisers require that franchisees purchase certain equipment, products or services from designated suppliers or affiliates.

Close up of male hand making a chess move.

7. Be Risk Averse

One of the most important characteristics of a great franchisee is that most of them are risk averse. While they are willing to take some risk, they want that risk to be as small as possible. A franchisee is looking for a proven business plan that is guaranteed to have a high chance of success especially when following guidance of a franchisor.

As former Intel CEO Andy Grove wrote in his book, Only the Paranoid Survive, the best way to maintain a business’s success is to always be paranoid. This doesn’t mean that you have to be anxious and paranoid about little things all the time. But you need to stay vigilant and detail-oriented when it comes to analyzing and managing every detail that you come across. So, being risk averse and second-guessing everything is not always a negative thing: it can be helpful and mitigate risk.

Further Reading from Skills You Need

The Skills You Need Guide to Business Strategy and Analysis

The Skills You Need Guide to Business Strategy and Analysis

Based on our popular management and analysis content the Skills You Need Guide to Business Strategy and Analysis is a straightforward and practical guide to business analysis.

This eBook is designed to give you the skills to help you understand your business, your market and your competitors.

It will help you understand why business analysis is important for strategy—and then enable you to use analytical tools effectively to position your business.


You don’t necessarily need to have all the qualities and skills mentioned here, but you do need to always be willing to practice them.

Listen to people’s advice, gather information, ask many questions, be detail oriented, review the law and always watch out for possible threats. Cautiously researching and investigating the franchise will minimize risks, identify potential problems and increase your chances of business success!

About the Author

R.S. has been writing and drawing for as long as she can remember. She recently relocated from Thailand to Brisbane, but loves to travel all over the world if the situation allows her to. This blog post has been written with the help of Streeterlaw from Sydney. Lately, she's been a little bit obsessed with her side business, stationary items and good books.