The licensing partnership between franchisee and franchisor means a long-term commitment for both parties over years or even decades. In particular for the franchisee, who possibly works within the framework of a franchise concept for the very first time, it is important to realize the importance and necessary prerequisites of a productive franchise partnership before concluding the franchise agreement. That is why, Engel & Völkers summarizes the basic information for prospective franchisees, that should be considered in order to make your franchising investment a successful project, below. These references, based on recommendations from the International Franchise Association, are applicable beyond the real estate franchise and are designed to help franchisees across various sectors to make the right decisions on their way to the franchise partnership.
Before giving your franchise idea any deeper considerations, you should reflect on whether your personal qualities, abilities and living conditions are compatible with working as a franchisee.
In your new position as a franchisee, you have the responsibility to bring your franchise business on an economically successful course and to keep it there on your own responsibility. On the one hand, this requires skills such as leadership, risk management and stress resilience, and on the other hand it requires professional qualifications in the field of business administration. In addition, you benefit from industry-specific knowledge, which you can acquire either before the franchise partnership or through parallel training courses.
Give enough attention to the estimation of your time reserves in preparation for the franchise partnership. Working as a franchisee does not have a fixed working schedule: Conception, administration and control of the company require capacities that can go beyond working as a dependent employee - instead, you are rewarded with a high degree of self-organization and unlimited earning potential.
In addition, you need a certain starting capital to open your franchise business. Some of the costs that you must pay in part at the beginning of the franchise partnership include, for example, the rental and incidental costs of the necessary real estate, the franchisor's license fees, the purchase of goods, equipment, personnel costs, and any allowances for a tax service or a Legal advisor. In the rarest cases, the franchisee is able to finance these sums of equity on their own - often however, a bank jumps in as a lender. In some situations, public funding can also be obtained - see our Financial Franchising article.
Since you, as a franchisee, want to benefit from the established corporate structure and customer loyalty of a well-established large company right from the founding of your franchise business, you should primarily focus on promoting your franchisor's reputation and experience on the market. The better known the products, and the bigger and more successful the sales network of the franchisor is, the more potential customers you gain for your franchise business. Since the franchise concept of a larger franchisor has already proven itself on a broad basis, this is more likely to be a successful adaptation by your company than an inexperienced franchisor whose concept you are one of the first to test as a prototype. So unless you are fundamentally convinced by the idea of a small franchisor and are passionate about its vision, you should stick to the industry's lead wolves, which can bring you much higher returns. In addition, the franchisor regularly provides your business with up-to-date sales strategies, training opportunities and product concepts due to its continuing obligation. Since large franchisors can usually spend more time and personnel on these services, they are generally superior in quality to smaller franchisors.
For over 40 years, Engel & Völkers has recorded continuously growing sales figures in the area of the real estate franchise and a network of independent franchisee-owned real estate shops that expands to 800 locations worldwide. In addition to our well-known brand, which has an excellent reputation both within the industry and externally, we are able to offer our franchisees attractive advantages in terms of corporate identity, work environment, training and networking. Are you interested in our offer and would like to enter the real estate franchise? We are happy to assist you during a personal consultation - we look forward to seeing you!