Skills Required to Run Franchises

By Kerry CroccoOctober 29, 2019

Most employees, at one time or another, dream of becoming their own boss. While there are unlimited options for you to start a business from scratch or buy a previously-owned business, they involve major risk. To increase your chances of success, you may want to consider investing in a franchise. Read on to learn about the skills required to run different franchises and figure out which best suits your background and talents.

Basically, a franchise uses a business model where you buy the rights to a brand name so that you can benefit from the brand recognition, proven system, and expertise of an established company. This enables you to receive training and guidance from the parent company and start your business much faster than if you built a business yourself.

management meeting

Types of Franchises

Numerous franchise models exist, and each model has its distinctive features. These elements range from the size of the franchise and its brand to the terms of the franchise agreement. Each franchise is different because it depends on how the franchisor allows you to use its system.

1. Product Distribution Franchise

Just as the name implies, this business model involves the distribution of product directly from centralized suppliers to the franchisees and then to consumers. Local franchisees enable branded distribution that would otherwise be difficult for the franchise company to achieve.

However, this is not a distributor or retailing franchise. Instead, the franchisee buys the rights to use the brand and patented trademarks to distribute the products. Some of the best case studies of a product distribution franchise include Coca-Cola, Pepsi, and other beverage companies.

A franchisee pays the company royalties on its sales in exchange for the rights to use the trademark. Then, the franchisor provides the ingredients to the regional companies who then distribute the ready drinks to retailers. So, the franchisor is only responsible for the quality of their products while the franchisee takes care of the distribution and other business arrangements.

2. Business Franchise Model

A business model is evident across all the franchises in a specific brand. KFC and McDonald's, as well as other fast-food companies, are some of the best examples of these models.

In this model, the franchisor is responsible for building the brand and marketing the products on behalf of the individual franchise locations. The company controls the quality of its products across its franchises.

For instance, when McDonald's decided to start selling their products overseas, they franchised their business to reach as many people as possible. Customers come to KFC or McDonald's because of the success the fast-food franchise has had in the US. The buyers want the taste of the food, and so the parent company has to maintain and replicate it worldwide across all their restaurants.

3. Management Franchise Model

Sometimes, the franchisor only takes care of the business operations while the franchisee is responsible for the management. Among the best ways to explain this model is to use FedEx as an example.

FedEx is a worldwide company that delivers parcels and documents to any address you want. The courier company, however, cannot provide these services at the customer level. So, they depend on its local delivery licensees to do that. The parent company offers delivery services to specific offices.

Skills to Make a Franchise Successful

When choosing a franchise that you want to invest in, evaluate whether your skills and interests match those needed to operate the franchise. Here are some essential skills needed to become a successful franchise owner:

Hiring

Are you a good judge of character and reading people? These skills will come in handy during the hiring process. The secret to any business operation and success is in the team you build. Invest your time and resources to find the best talents. The people you hire must fit the brand’s culture and vision. It's especially important to have driven people behind you to carry out the objectives of the business.

Interpersonal and Communication Skills

If you are running the daily operations of a business and you are in front of customers in a retail setting, being a people person is a must. If you're warm and welcoming your franchise will be too. Earning the trust of people you are working with will also help you to be successful with your franchise. Interact with the employees and demonstrate your interest in the company and their work.

Ability to Follow a System

One of the most important factors of operating a franchise is following a system and maintaining the brand identity. You must be willing to learn and follow the franchisor's business plan to successfully duplicate the proven process.

Results-oriented

Driven leaders are focused on achieving goals and are constantly motivated to improve the franchise. If you have an entrepreneurial spirit and passion for running a business, franchising may be a great choice for you.

Resources
https://www.businessinsider.com/what-it-costs-to-open-a-kfc-2015-7
https://www.kfc.com/about/franchising
https://www.mcdonalds.com/us/en-us/about-us/franchising/acquiring-franchising.html
https://www.coca-colacompany.com/our-company/suppliers/supplier-requirements
https://en.wikipedia.org/wiki/Franchise

About the Author - Kerry Crocco

Marketing Coordinator for Franchise Solutions and Franchise.com; conduct email marketing campaigns, web page management and trade show coordination. Mother of two, wife and Young Living Essential Oils representative.
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