Much as is the case in launching any other type of small business, one person acting alone may not possess a dynamic enough skillset — or may simply not have the time to devote to the daily operation of the business—to drive the success of a franchise. For myriad reasons, entrepreneurs who invest in opening a franchise location take on a partner.
How Do I Work With a Partner to Buy a Franchise?
An owner who is engaged in a full-time career and wants to use his or her capital to open the franchise on the side is likely to require the help of a partner who will be hands-on in management of the new venture — who contributes “sweat equity.” Or, perhaps one owner is introverted but brilliant at operations and needs an outgoing partner who is adept at marketing and promotions and being the “face” of the operation locally. An ideal partnership brings together people whose skills complement each other.
Forbes suggests taking a personality test to see where your strengths lie. If you lack key traits to be successful in business but do have the drive to go for it, a partner with different skills who complements your creativity or vision may be a great idea.
As you begin to draft your business plan, You may identify areas where your own skillset — or available time — may not cover what needs to be done to bring the franchise to fruition and success. In that case, it may be time to consider a franchise partnership.
Partnering May Be Necessary
Striking the best franchise partnership requires some consideration. However you slice it, a good partnership will involve splitting duties and/or costs and risks. A partnership also means having someone at your side to celebrate victories and successes, as well as having a confidante to help share the blows of occasional failures along the way.
Even if you are confident you have what it takes to do it all as the owner of a franchise, you may not have the capital or credit to fund the initial investment and costs of keeping it going until it gets legs, which may take anywhere from several months to a few years, depending on the type of franchise.
In this case, bringing in a partner with capital may be necessary. Don’t let it harm your pride; no successful entrepreneur really does it all on their own.
While, in theory, you can bring in as many partners as you wish, the more chefs you gather around the soup, so to speak, the more opportunity for disagreement and differences of opinions and vision, resulting in more opportunity for the partnership to splinter.
How Should We Structure Our Business Agreement?
An old saying goes something like this: “No one will do you wrong in business like family or friends will.” In other words, no matter how well you get along upfront with your prospective partner(s), put the relationship in writing just in case. And that applies to finances as well as each partner’s role.
Industry expert resource Franchising.com cautions entrepreneurs with partners to hope for the best while planning for the worst, explaining, “No matter what type of partner you take on (silent, family, friends, private equity, angel investor) you first must decide how much control, if any, you are willing to give up. For many, it comes down to a matter of personal style; some people work better on their own, no matter how hard they may try to do otherwise.”
The business agreement should spell out each person’s respective roles in the operation and what duties they are expected to handle. It should also enumerate what each partner invests financially and what percentages of profits and losses they share. And the agreement must set forth what happens if the partners decide to dissolve the partnership, or what happens if one partner violates the terms of the agreement.
If you must bring in several financial backers as partners, it is advisable that your business agreement includes specifically what rights they have in decision-making.
It is highly advisable to consult with an attorney to draw up the right agreement — and guide the partners on the best corporate structure to choose — and for each partner to have his or her own counsel review it.
This Sounds Messy. Do I Have to Have a Partner?
Ultimately, a confident owner who doesn’t need assistance gaining the financing to invest in a franchise, and who has plenty of time to devote to daily operations, may prefer the autonomy of going it alone. But ultimately, even a so-called solo owner still enjoys a very beneficial partnership if he or she chooses an established franchise brand — when you think about it.
Indeed, being part of a franchise system — and capitalizing on the partnership of its operational systems, brand recognition, support, and much more — eliminates many of the scary aspects of lone ownership one might encounter in an independent business. And that’s what effective teamwork and partnership should be about.
Wayback Burgers is a Connecticut-based fast-casual franchise with a reputation for cooked-to-order burgers and thick, hand-dipped milkshakes, served in an environment that hearkens back to a simpler place and time — when customer service meant something, and everyone felt the warmth of the community. The rapidly-expanding burger franchise offers qualified candidates the opportunity to open and operate a business in the highly sought-after fast-casual sector.
For more information on how to get started, visit https://waybackburgers.com/franchising/.