One of the first decisions you’ll face on your franchising journey is whether to opt for an owner-operator franchise or a management model. Justin Nihiser, CEO of Code Ninjas, makes the argument for the latter and why taking a step back to digest the bigger picture is often a recipe for success
When researching opportunities in the franchising industry, the possibilities can seem endless. Multiple decisions come into play; how involved do I want to be in the operation of my franchise? Is this a long-term investment or a short-term opportunity to boost earnings? And do I want to go into something new, or utilise career experience?
One of the first decisions you’ll face on your franchising journey is whether to opt for an owner-operator franchise or a management model.
The owner-operator delivers the product or service of their franchise – think of a food truck franchise where you drive the truck, cook the food and serve the customers, all whilst completing the daily admin behind the scenes. In most cases, this is your sole responsibility and source of income. This means you’re able to exert more personal control over the business and must be present to deal with all eventualities that arise. In addition, because you have to be completely hands-on to establish the business, it often requires less capital to grow the business, although it may take a little longer.
When you invest in a management franchise, you will start the business with a team in place to deliver the day-to-day activities whilst you manage that team. In some cases, you may have other business interests – perhaps even multiple franchises – and you instead hire a manager to run the franchise on your behalf. Instead of the owner-operator with one food truck, you may have a fast-food restaurant and although you may not be working ‘in’ the business every day, you will instead be working ‘on’ the business at a strategic level.
To help you make an informed choice here is my insight on the benefits of a management franchise and why taking a step back to digest the bigger picture is often a recipe for success.
In my 10-plus years in the international franchising space, I’ve worked with franchisees from all walks of life. Some have invested their life’s earnings in realising their dream of running a music shop in their hometown, whilst others have aspirations of developing a team of employees. Whatever the end goal, franchising is bound to provide the lifestyle solution you’re striving for. But for business owners looking for more autonomy and opportunities for long-lasting financial gain, then a management franchise might just be perfect for you.
Whether you invest in a management or owner-operator franchise, you can expect to receive a whole host of specialist support from your franchisor. But the specifics of that guidance will differ as your franchisor creates a bespoke plan of support to suit your needs.
Guidance with recruitment of key operational team
When it comes to a management franchise, experience in the industry or service you opt to invest in isn’t necessarily a prerequisite for success. As the name suggests, the backbone of what you will be doing is managing other people, so the experience that a franchisor will look on favourably will be leadership in any sector. Therefore, recruiting the right team of people to deliver your service or produce your product is crucial. That’s where your franchisor comes in.
Although the decision will ultimately be down to you, any quality franchisor will offer insight and guidance on how to recognise talent at interview stage. It’s also imperative that you feel comfortable with the interview process in its entirety; this is also something your franchisor can help with. Utilise their experience in successful recruitment - after all, they approved your application - and call on them for advice where it’s needed.
Your franchisor knows what it takes to make a success of your franchise and, perhaps more importantly, who it takes. They’ll be able to recognise key individuals within your new team who will support you to take your business to new heights. Although your franchisor won’t be working on your business with you on a daily basis, they’ll be able to recognise trends and monitor your progress, ultimately highlighting who is doing a stellar job.
Insight on how to scale up the franchise and support with strategic expansion
One of the key appealing attributes of a management model franchise is the opportunity for large-scale growth. But, when taking into consideration the additional resources this requires, you’ll need to invest time into constantly reviewing and revisiting your growth strategy. Having built and maintained a reputable franchise from nothing, who better to advise you on how to achieve this than your franchisor?
Many components come into play when building a comprehensive business plan. If you’re planning on scaling up the business by investing in multiple locations, a franchisor will work with you to devise actionable steps to reach this goal. They will also work with territory mapping specialists to find the most suitable locations for your personal circumstances. And as the business grows, so will your team of employees, overheads and marketing fees. Your franchisor will ensure you understand the impact of these increases in costs so you know when it’s financially viable to take the next step.
Support with succession planning
When you invest in your own business, you have the chance to create a legacy. And when the time comes to move on to pastures new, you’ll have options. You can either opt to sell the franchise on - again, with support of your franchisor - to another owner or simply continue to own the business but take a step back from making the strategic decisions by hiring a manager. Although this means that you will continue to play a crucial role in the business, you may find that you’re able to check in with your team once a day, week or month, depending on your preference.
Franchisors will work with you throughout the life of your franchise to help you forward plan for when this day arrives. After all, one of the key reasons that investors opt for a management model franchise is the opportunity for a better work-life balance.
At Code Ninjas, our network is made up of a combination of owner-operator franchisees and those who choose to take a step back and let someone else handle the day-to-day activities. Both have found our investment opportunity to be incredibly rewarding in a variety of ways. Whichever option suits your needs, you should feel safe in the knowledge that your franchisor will act as your guiding light throughout your franchise journey.
Justin Nihiser is the CEO of kids coding specialist, Code Ninjas. At locations across the UK, Canada and the US – where the brand was launched in 2016 – kids learn to code in a fun, safe, and inspiring learning environment with a game-based curriculum that they love and through which their parents clearly see results.