After I delivered a lecture about franchising a few years ago, I was subsequently approached by an Overseas Filipino Worker (OFW) who was very interested in the topic. As with most OFWs, he planned to return to Saudi Arabia after the grand opening of his business and he planned to delegate this task to his wife. This posed a problem as most franchisors expect the owner to be active in the business, but economic factors force OFWs to return to a different country. From my discussion with him and other OFWs, I wanted to share some insights into a few secrets to ensure franchise success, especially for those working abroad.
1. Save money to buy a unique franchise that you love, not just one that you can afford
Investing in a franchise is a long-term commitment, and you will be faced with the business day in and day out, so you need to ensure that the business you invest in is something you believe in, something you enjoy doing and something that you would be proud to represent. Of course, there are some franchises that are just a bit over the savings you may have, and this is where you can explore getting new investors, getting a loan or speaking with the franchisor. What’s important is you don’t settle for a franchise you do not really believe in as this will be detrimental to you in the long term.
2. Managing the business is key
Franchisors prefer that you as the owner manage the business, but if you plan to have your wife or children manage, make sure they are part of the process of choosing the franchise. They should be part of the search for a business, applying for the franchise and even looking for the location. They need to feel ownership. This is not a condo that can just be passed on; there has to be real interest from the people managing it.
3. Leverage technology to help you manage remotely
Although you will not be operating the business day to day, with the improvement in technology, you can still keep an eye on important aspects of the business even if you are abroad. Invest in cloud-based POS and accounting systems so you can keep track of sales and expenses while you’re away. CCTVs can be accessed online so you know what’s happening in store. If needed, you can also interview key personnel via Skype before hiring and do regular meetings with your key managers.
4. Create a buffer fund
Make the most of your income abroad to create a buffer fund. Save enough to open the business, but also create a fund to manage the ups and downs of the business. Don’t invest all your life savings in one business. Franchising has a 90-percent success rate, but you still need to prepare your buffer fund to manage the ups and downs of any business.
5. Trust and work with the franchisor
The franchisor’s success relies on the franchisee’s success. They will train not only your family who will stay to manage the business but also their employees. In addition, during the grand opening, the franchisor might even send an “opening team” who are his or her “veteran employees.” These tenured employees will actually demonstrate the operations, and the franchisee’s new employees will learn as they go. The franchisor will also continually conduct training in order to assist your team so that they will continuously improve.
The OFW who spoke to me a few years ago followed these tips, especially the idea of creating a buffer fund, and he’s been able to create franchise success. Luckily, he did not lose money during the first few months of operation so he subsequently used the savings (which was originally intended as a buffer fund) in order to put up another business. Now, he has two franchise businesses, and he is planning to put up another one. Another plus: he is no longer working in Saudi Arabia.
Finding the right franchise starts with education. U-Franchise conducts regular “How to Invest in the Right Franchise” seminars. For more franchise opportunities visit www.ufranchiseasia.com or call(+632) 6340586 , (+63917) 8816999
Chris Lim is the Senior Vice President for Marketing and Strategy of Francorp Philippines (francorp.com.ph); President of U-Franchise Sales & Management (www.ufranchiseasia.com); and Chairperson and Director for Special Projects, ASEAN Integration-Philippine Franchise Association.