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Common Challenges Faced by New Franchisees and How to Mitigate Them

Investing in a franchise can be an exciting step in your career, but like any business opportunity, there will likely be hurdles you need to jump before establishing a process that works best for you. Below are some potential challenges a new franchisee may face and how to best combat them so things run smoothly.

Challenge #1: Following a Set Business Model

Although you are aware from the start that you must adhere to your franchisor’s established business model, it doesn’t negate the fact it can cause some challenges. This can especially be true at the beginning of your journey when the doors to your location open and you start conducting daily operations.

If this is your first franchise investment or you come from an entrepreneurial background, following an established business model can take some getting used to. It is especially important to remember that in franchising, the corporate or home office team is the one making many decisions on things like products/services and marketing/promotions. Therefore, although franchising can offer a level of independence, allowing you to be your own boss and run your own location, you must stay aligned with the business model, as straying from it is often prohibited.

Solution: Some of the best ways to mitigate this challenge is to have an open line of communication with your franchisor and ensure that you keep brand guidelines fresh in your memory. This can look like double-checking with your franchisor if you’re unsure of certain things and reviewing their manual or brand guidelines to ensure you’re keeping on track. Failure to adhere to the business model can jeopardize a franchise’s success. Therefore, if you find you’re facing any sort of challenges following the parameters set by the franchise, particularly in the beginning if you’re not used to it, or you want to prevent yourself from having those challenges in the first place, check in with your franchisor to make sure you’re heading in the right direction; it’s better to be safe than sorry!

It is also important to remember that this business model has been established to generate success. When franchisees succeed, the franchise business succeeds. This model is not meant to restrict franchisees but rather to provide them with a clear path that maintains the consistency and quality of the brand, leading to overall success. One of the great elements of franchising is that much of the work involved in building up a business, establishing an audience, and generating brand recognition is already completed. By following this model, franchisees can trust that the decisions made are backed by research and expert knowledge.

Challenge #2: Navigating Franchising Fees

Franchising fees will not likely come as a surprise once you open the doors to your franchise location. After all, you will have already paid the initial franchising fee required (the one-time payment to join the franchise) and will have been made aware of the ongoing franchising fees required of you, such as royalties and advertising/marketing fees, outlined in your Franchise Disclosure Document and/or Franchise Agreement. However, once you step into your role, some franchisees may face the challenge of balancing the budget.

Fees are required no matter the amount of revenue you have generated. Therefore, one of the best ways to mitigate this challenge is something you can do before stepping into this role—ensure that your finances are in order. Of course, there are going to be different financial requirements for each franchise system, such as a minimum net worth or liquid capital, but it is also important to consider the financial elements required of you once you become a franchisee. Will you need to secure funding to cover some of the costs? Will you need to apply for loans? Evaluate your finances first and align them with the required ongoing franchising fees expected of you.

Another way to mitigate this task is to create a detailed budget/plan as early as possible. Ensure that you are aware of your daily expenses and keep track of your revenue, as this can help you stay on track and better predict how much revenue you’ll need to generate each month to cover the ongoing fees.

Challenge #3: A Work-Life Balance

One of the reasons why someone may pursue franchising in the first place is to maintain a greater work-life balance than what a corporate career might offer. And while franchising can certainly deliver this, it may take a bit of time to get to that stage. Getting your franchise location off the ground may require a substantial time commitment, though the expectations and responsibilities you have at the beginning can change as time goes on. Therefore, a challenge that new franchisees might face is trying to navigate the involvement required at the beginning to maintain a work-life balance until things are more established.

Solution: Finding a solution can vary depending on the franchisee, but one of the first ways to mitigate this challenge is to enter the role with this expectation in mind. Knowing that you may have to put in a bit more time initially until you can feel settled into the role can help put things into perspective, especially since a greater time commitment can yield greater results in the long run. Another way is to build a team of reliable employees. Of course, this will take some time and may even be a bit of a challenge in itself at the beginning. However, once you have a team you can rely on to perform daily operations, even in your absence, it can be a great help when you want to establish a better work-life balance.

Franchising with The UPS Store

If you are interested in bringing The UPS Store to your community, we encourage you to review our detailed FAQ page with answers to your most common questions about franchising with us. You can also review our support and training pages to see how The UPS Store assists franchisees throughout their journey.

About The UPS Store

UPS Author Information Image

With over 350 franchised locations, The UPS Store is Canada’s largest network of print and copy centres. The UPS Store offers complete business support services such as digital colour and black and white printing, full document finishing, worldwide shipping and packaging services, mailbox rentals with 24 hour access, mail forwarding, package/mail and fax receiving, and mail fulfillment. The UPS Store operations in Canada are owned and managed by Oakville, Ontario based MBEC Communications L.P. The UPS Store name is used in Canada under a master license by The UPS Store, Inc., a UPS company.