Franchise Opportunities Blog
Business Knowledge Equals Business Results in Franchising
By: Dr. Kathleen Gosser
Buying a franchise provides you with the business format including products and branding; however, your franchisor expects that you have the business acumen it takes to run a great franchise, take necessary risks, follow all legalities and maximize sales and profits.
Is all of that business knowledge given to you with your franchise agreement? Sadly, no it is not.
It is up to you as the franchisee to have that knowledge to run a great business. The current marketplace is highly competitive and without deep knowledge of basic business skills, it will be difficult to succeed.
What business knowledge should you have to supplement your franchisor support?
Know the Legal Landscape
The first step is to ensure you understand all of the legal fabric of franchising. This includes a thorough knowledge of the Federal Disclosure Document and the franchise agreement. While ensuring an attorney evaluates all documents, it is important that you as the franchisee understand what these documents mean as this is your investment and livelihood that could be at risk.
You also need to have a strong understanding of financials. This includes knowing what it takes to make a return on your investment. You’ll need to understand where to get the investment dollars you need in the beginning.
Then, managing a Profit and Loss statement is a critical role for every franchisee. Knowing all the manageable expenses in the P&L and how to minimize costs while maximizing profits AND taking care of your employees and customers is a skill that takes time. Knowing how to leverage labor costs and manage cost of goods sold are two areas of the P&L that will make the most difference in your profitability. Before you embark on a franchise adventure, having a clear foundation of knowledge in this area is imperative.
The Knowledge to Succeed
These are just two areas that require extensive business familiarity. While you could learn this in the marketplace, it will take a great deal of time. A solid business school education will provide the springboard you need to success quickly.
For more information on the Franchise Management Certificate from the College of Business at the University of Louisville visit uofl.me/2qmjPV.
Dr. Kathleen Gosser (PhD, University of Louisville) is an experienced leader in the franchise industry and a passionate educator. In her 30 year career in the franchise industry, she has enjoyed numerous roles, including leadership of customer satisfaction programs, operations measurement, employee recognition, training and team member engagement efforts. She also had direct P&L accountability as the Region Coach of 10 restaurants in Louisville, Kentucky.