Franchising 101: What to Know + Dos and Don'ts for Success

The International Franchise Association (IFA) finds that the total output of franchised businesses in the U.S. is expected to increase in 2024 by 4.1% to $893.9 billion, up from $858.5 billion in 2023. This includes a 4.3% increase in GDP to $545.8 billion. Franchising is also expected to add 221,000 jobs in 2024, bringing the total number of franchise employees in the U.S. to 8.9 million.

Whether you're looking at fast-food chains, retail stores, or service-based businesses, understanding the basics and knowing the dos and don’ts of the industry can make all the difference in your journey to success. Our franchising 101 rundown will tell you what you need to know as a potential franchisee, including the minimum requirements, strategies for going above and beyond, and pitfalls to avoid.

The Basics of Owning a Franchise 101: What to Expect

As a franchisee, you can expect to follow a set of guidelines laid out by the franchisor, covering everything from the products or services you offer to the layout of your store. This consistency is a hallmark of franchising and a key reason customers trust franchise brands — they know what to expect no matter where they are.

Great franchisors have all learned from their mistakes and can share lessons with their franchisees. As a franchisee, you can benefit from the knowledge and well-earned expertise of a proven system that has weathered storms and developed strategies for success.

Make no mistake — being a franchisee is not a passive role. While the business model is provided, the day-to-day operations and ultimate success of the franchise are in your hands. It requires a significant investment of time, energy, and financial resources.

Minimum Requirements for Running a Franchise

Before you fully understand franchising 101, it's essential to be aware of some minimum requirements. Here are some critical factors to consider:

Financial investment: Most franchises require an initial investment that includes the franchise fee, costs for equipment, inventory, and initial marketing, as well as working capital to cover expenses until your franchise becomes profitable. Be sure to investigate outside funding sources, including SBA loans for franchises. Whatever approach you take, make sure you have the necessary funds, and don't forget to account for ongoing royalty payments and marketing fees.

Business acumen: While franchisors provide training, having a basic understanding of business operations, financial management, and customer service is crucial. If you’re new to business, consider taking courses or seeking mentorship to build your skills.

Commitment: Running a franchise is not usually a part-time endeavor. It demands your full attention, particularly in the early stages. Be prepared to invest long hours to ensure everything runs smoothly.

People skills: Whether you're dealing with customers, employees, or the franchisor, strong communication and interpersonal skills are essential. Your ability to lead a team and maintain customer satisfaction will have a direct impact on your business’s growth.

How to Ensure Your Franchise is Successful

Successful franchising requires more than just meeting the bare minimum. To truly excel, consider going above and beyond with these strategies:

• Embrace the training: Take full advantage of the training and support offered by the franchisor. Engage with other franchisees and learn from their experiences. The more you immerse yourself in the brand, the better equipped you'll be to handle challenges.

• Focus on customer experience: The core of Two Maids' success lies in exceptional customer service. Create a welcoming, reliable, and consistent experience for your clients. Happy customers are more likely to become repeat clients and refer your services to others.

• Invest in marketing locally: While Two Maids provides national marketing support, consider additional local marketing initiatives tailored to your community. This could include local SEO, community events, or partnerships with local businesses.

• Hire and retain quality staff: Your staff are the face of your business. Invest in their training, create a positive work environment, and strive to reduce turnover. A motivated, well-trained team will improve your service quality and customer satisfaction.

• Track performance metrics: Use the tools provided by the franchisor to monitor your business performance. Regularly review things like customer satisfaction scores, revenue growth, and employee performance. Use this data to make informed decisions and adjustments.

Pitfalls to Avoid

When you choose the right franchisor, take their guidance and best practices to heart. They have experience in developing models that work, and you’ll benefit from their knowledge.

Franchising is not a “set it and forget it” investment. Be prepared to work hard, especially in the early stages. Underestimating the time and effort required can lead to burnout or poor business performance. Remember that success often hinges on community engagement. Neglecting to build relationships with local customers, businesses, and community organizations can hinder your growth.

Poor financial management is a common pitfall for many franchisees. Keep a close eye on your cash flow, manage your expenses, and ensure you plan sufficient capital reserves for unexpected challenges.

Growth is exciting, but expanding too rapidly without sufficient resources or preparation can jeopardize your existing operations. Focus on stabilizing and optimizing your current franchise before considering expansion.

Build Your Franchise Business with Two Maids

As a member of the Home Franchise Concepts family of home services brands, Two Maids understands what it takes to lead franchisees down the path to success, whether they are seasoned entrepreneurs or new to business ownership. From upfront training to ongoing support and marketing assistance, we know what it takes to help you thrive.

Request info to learn more about our franchise opportunities!