Key Franchise Mistakes: Assuming Security
Posted on: October 10, 2017 by RMS Hospitality
Franchise Ownership Pitfalls > Low Survivability Rates
Buying into a franchise operation has plenty of perks. To start, the business is well-known and established and the groundwork has been done. However, this doesn’t mean that franchisors are guaranteed financial security and success. In this installment in our article series regarding key franchise mistakes, we’ll take a closer look at the realities of owning a franchise and how to make it successful. We’ve already discussed that the illusion of having all the freedom to run the franchise, and this article goes in hand in hand. In addition to sharing this information with your clients, ensure they are adequately protected with the most comprehensive Franchise Select Insurance Program available.
The Small Business Administration’s Office of Advocacy newsletter, The Small Business Advocate says, “Survival among independent businesses and franchises appears to be similar, as they have similar age distributions.” The newsletter later says that about half of new businesses survive at least five years, about a third last a decade or longer, and being a franchise doesn’t change that.
While franchisees have the benefit of the entire operation already spelled out for them, it’s up to the individual owner to set, carry out and measure financial goals of the franchise. Here is how to assure the franchise is successful with SMART goals.
- S – Franchisors can set specific goals they’d like to reach. For example, the goal can be to generate $200,000 in one quarter.
- M – Measuring goals is the only way to gauge the success of the franchise. This should be either a yes or no answer if the goal has been attained.
- A – Attainable goals are the foundation for any financial security in a franchise. Otherwise, franchisees run the risk of losing motivation to achieve them.
- R/T – Realistically timetable goals. According to Entrepreneur, goals have to have a deadline, a “by when” date. Goals without a deadline don’t inspire commitment. It’s human nature not to take action on anything they wish to achieve someday.
About RMS Hospitality Group
At RMS Hospitality Group, we strive to protect each facet of franchises. For decades we have provided quality insurance solutions, business consulting, and aggressive claims management for businesses nationwide. As a testament to our experience, we were appointed in 1994 as one of the few “McDonald’s Approved Vendors” for franchises nationwide and became the largest broker in the system through the decade. We are also proud to announce that we are recognized as a Dennys Franchise Association Allied Partner. For more information about our comprehensive list of products, we invite you to contact us today at (516) 742-8585.