Associations have a relatively low success rate when starting a franchise. Well the same is true for any business. Because?
Most partnerships collapse within a few years or even months due to mistakes during their structuring process. In many cases, partnerships are formed because a person cannot afford a business or does not have the experience to start one.
As a result, excited to find a partner and make an individual dream come true, entrepreneurs rush to get started before taking care of some important details. Here are a few things to keep in mind when starting a partnered franchise business:
1- What is the exit strategy? – Make sure you share the same vision of where you want to be in 5 years. If an offer appears to buy your franchise, what will you do?
2- Decide what to do if you stop agreeing on certain things; Before you begin, you need to have effective conflict resolution tools in place. You are going to be spending a lot of time with your franchise partner, so don’t expect to agree on everything.
3- Decide who is the boss: It is almost impossible to have a 50/50 partnership. Someone has to be the boss or the CEO. This way you know who is responsible for a final decision up front instead of having to decide every time on the spot.
4- Consider a limited partnership – Make sure all of your business obligations are clearly stated. Entering into a limited partnership agreement might be the best way to go. v 5. Look at some examples of successful partnerships: Baskin and Robbins (Ice Cram franchise) come to mind. Take the time to research what made others successful in this arrangement. When considering a partnership, it is also helpful to consult a lawyer to incorporate all the details into a partnership agreement.
Ultimately pairing can be a great option for you, the key is to carefully consider all of your options and document everything properly.