The first step in making a successful franchise investment is to determine
whether the business model is a good fit for you. This can be determined
by looking for alignment in three key areas: your
personal and financial goals, your skill set, and the franchise offering. If there is alignment in
these areas, you will be in a better position for success.
Essentially, there are
three types of franchise business models, each with different assets and liabilities. They vary in terms of time
commitment, start-up and operating costs, required level of industry knowledge,
scalability, and personal freedoms. It’s best to start by closely
examining what you want from a business and how you envision your ideal role.
Looking at the varying business types, there are some clearly defined roles
a franchisee takes depending on the type of business model. An owner/operator
model requires more of your time and is an immediate career change and
income replacement; you work in the business. A semi-absentee business
model relies on managers to run the day-to-day operations. The franchisee works
on the business rather than
in the business, allowing you up to maintain a separate career. This model
is a long-term investment rather than a total income replacement. An executive
business model takes a completely hands-off approach, requiring more operation
costs but minimal time commitment.
After considering which business models are in alignment with the role
you would like to take, you should do a gap analysis. Is your skill set
complementary to the business model and vice versa? If you are becoming
an owner/operator, you would need to have the skills that business requires.
For example, if you were looking at a restaurant franchise, you would
need to know how to operate the restaurant. Conversely, in a management
led structure, industry knowledge is not necessary, as your role is to
manage the people who have the knowledge and experience. An example of
this would be a hair salon: you do not need to know how to cut hair personally,
and instead hire and manage trained stylists who do.
Your gap analysis should compare your skill set with the business structure
and support systems offered by the franchisor. Do they fill in where your
skills are lacking? If you do not excel in people skills,
a business model which relies on managing people, such as semi-absentee, would not be an ideal fit. A good franchisor will
provide business best practices and support, which will fill in knowledge
gaps. Though this only helps if your skills are in alignment with what
is required from your role in the business.
Alignment should also be present with your goals for business growth. Is
scaling your business a priority? Some business models are better designed
for scaling than others. An owner/operator model will limit your ability
to do this beyond your personal capacity, whereas semi-absentee and executive
models give you more freedom to scale. It is important to have clarity
on your goals and whether the business model you are considering can get
Last, but not least, you should make sure there is alignment with your
personal values and the values of the brand you are considering. How comfortable
are you with the mission and vision of the company? For example, if there
is a “people first” mentality, but you would rather work with
numbers, then you and the company may not be well matched. Looking at
the company’s values and culture will also give you an idea of what
will be expected from you and what you can expect from them. This is a
key element in maintaining a healthy franchisee/franchisor relationship
and is a pillar of business success.
Looking for alignment in these outlined areas will allow you to better
position yourself to make a more informed decision. When alignment occurs
in these areas, it is an indicator the business model is a good fit for
your personal and financial goals, which in turn can translate into greater
For more information on the Sport Clips offering and whether it is in alignment
with your goals, let’s
continue the conversation here.