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Franchising blunders to look out forby Therese M. GutierrezIn a society where familiarity of products and services rake in big bucks, it is no wonder a lot of entrepreneursventure into franchising rather than set-up their own, unique business. While this is a widely practiced businessundertaking, there are still a handful of mistakes that entrepreneurs might commit.Remember that you are governed byterms and agreements as signed in yourcontract, violation of which may lead tothe termination of your franchise. Saveyourself money and headache; stick to thefranchisors plan – every bit of it.seven>Franchise systems areall about the same. Wrong. As with anybusiness entity, franchise networks aregoverned by an unwritten culture. Talk topotential franchisors and see where youfit. Carefully scanning the playing field willhelp you find your footing and allow youto better plan your business course.Jim Deitz also known as the FranchiseDoctor, shares with us ten potentiallydevastating blunders that entrepreneursshould veer away from:one>A great industry assures yoursuccess. Undeniably, market segments dovary; thinking that the bigger the segmentyou invested in means an instant success inyour franchise business might just pull youdown. Good old hard work, wise marketingstrategies and business acumen are factorsthat will keep you on business track nomatter what segment you venture into.two>You can open your franchisefor less than what the franchisorpredicts. As in real-life, never mislead yourfranchisor. If you are undercapitalized forthe project, it is best to be honest; lack oftransparency on your part may result toearly business failure.three>Bigger is better. Not interms of franchise existing chains. Donot base your judgment on the numberof franchisees a company has. “Greatmarketing, aggressive salesmen, and anattractive industry can cause a franchisesystem to grow even though there arebetter franchisors in the same industry.Call many franchisees and ask them howShutterstock photo / Sivaraman Gopakumarmuch TLC they receive. Then check in othersystems to evaluate the satisfaction levelof their franchisees,” Jim Deitz writes. Lookout also for overly large franchise network;too many franchise outlets in a specificarea can cause “overpopulation” – causingeach to steal business from others.four>Never be the First in aFranchise System. Why shouldn’t you?Who else is to receive the best attentionand technical help than a company’sfirst franchisee. As long as you did yourhomework and have researched wellabout the business you are getting into, allwill be well.five>There is no need to hire aprofessional until I return from initialtraining. Early business mistakes couldbe very costly. Best to stir away from themwith your arsenal – a group of professionalsto help you manage your business. Theyneed not be hired full-time, even on aconsultative basis will do.six>Using just about 80% ofthe franchisor’s business plan, andmodifying it later to fit your style ofmanagement. If you want to do thingson your own, you might be well-offwith your own business, not a franchise.eight>When you buy yourfranchise, success is guaranteed. Anynew business venture involves risk. Youmust be ready to work long hard hours toimplement the franchisor’s business planin order to succeed. The advantage is—you have a plan. The unknown is—howwell you’ll implement it.nine>Banks will lend you moneywhen you find the right franchise. Whilebanks are open to lending money especiallyto franchisees, you might not see eye to eyein terms of identifying the “right” franchise.While you are still gainfully employed, bestto save up for your franchise project; simplyborrow from the bank whatever amountyou are in deficit of.ten>”I know how to managepeople.” Better make sure you reallydo. If you have no (or a poor) experiencein managing and working with a groupof fellow employees, be sure to discussthis with the franchisor. In most systems,you’ll be hiring, motivating, and trainingseveral employees.Franchising really is a tall order.With determination however and properknow-how, it may just be a walk in thepark. Here in the country, a franchiser’sclosest ally could well be the Associationof Filipino Franchisers Inc. (AFFI),organizers of the concluded 6th FilipnoFranchise Show at the SM MegatradeHall in Mandaluyong City. / sme.com.ph