Top 10 Mistakes to Avoid When Opening A Grocery Mart Franchise

Starting a grocery mart franchise is a big decision. Though you can directly contact the franchisor anytime, there’s no guarantee of succeeding without the right preparation. Hundreds of people have thought the same and failed miserably.

Now, why does this happen? If we put aside some of the rarest cases, most franchisees fail because of mistakes. People do it all the time. Starting your franchise can be exciting and rewarding, but it also comes with risks.

These mistakes cost you effort, money, time and to some, even their businesses. So, how can you win? The simple answer is preparation. In this blog, we will share the top 10 mistakes to avoid when opening a grocery mart franchise.

Also Read: Top Things to Know Before Buying a Franchise for Grocery Store

10 Mistakes to Avoid When Starting a Grocery Mart Franchise

1. Not Doing Enough Research

The most common mistake is Not Doing Enough Research!

People want to start a supermarket franchise, but they don’t research enough. Why? Simply, it’s boring, and needs logical & critical thinking. On the other hand, taking actions based on promises is easy.

Before you open a grocery store franchise, you must do your homework. Many people jump in because they like a brand or see others making money. But every franchise is different. You need to:

• Study the franchise history.
• Talk to the franchise’s owners.
• Read the Franchise Disclosure Document (FDD).
• Check the financial health of the company.

Fact: According to franchise experts, a maximum number of supermarket franchises fail because of low or no research.

2. Ignoring Market Research and Location

The next big mistake you may make is not doing proper market research. Please understand that no two places have the same audience. It becomes more prominent when trying to do business in India, where culture, language, and preferences change every 10 KM.

Just because a grocery mart franchise works in one place doesn’t mean it will work everywhere. Understanding the local market and its choices is the key. What works in Delhi may fail in Gujarat or Chennai. So, make sure you have in-depth data about the local market and its buyers. Here are a few points for you.

1. Study the local area.
2. Check for enough customers and what they prefer.
3. Look at competitors near your store location.
4. Make sure your store is easy to find and reach.
5. Inspect the buying power of people.
6. Look for additional local things like culture, language, and demographics.

Tip: Several franchisors help you research the market. They also offer you the right tools and human resources. You can either use them or hire a local expert to help you.

Also Read: Pros and Cons of Different Location for Supermarket Franchise

3. Underestimating Financial Needs

Not knowing the In & Out of money flow is probably the biggest mistake while setting up a grocery store franchise. Many new owners think only about the franchise fee, but that’s not all. The Franchise Fee is just the tip of the iceberg. There are many other costs, such as:

• Rent or property costs
• Inventory (stock for your store)
• Staff salaries
• Marketing and advertising
• Equipment and setup
• Ongoing royalties and fees.

Several franchise owners offer you a package including these extra costs as well. However, it’s always good to check from your end.

Fact: You should have enough money to run your store for at least six months, even if you make no profit at first.

4. Not Reading or Understanding the Franchise Agreement

Now, coming to the legal part, you will be given a franchise agreement. It’s a legal contract between the franchisee and franchisor, stating several terms & conditions about the business model, ownership, profit dealing, and several other things. Simply, it tells you what you can and cannot do.

• What should you do with the agreement?
• Read every part carefully.
• Ask a lawyer to explain anything you don’t understand.
• Know your rights and duties.
• Check for rules about fees, marketing, and ending the agreement.

Don’t sign the agreement without understanding it. It may cause bigger problems later. You may lose your investment or face lawsuits, etc.

5. Skipping a Solid Business Plan

A business without a plan is just guessing. And of course, you shouldn’t do it. A business plan is like a map, providing the right steps to go forward. Without it, you can get lost. But what does a business plan include? Here is a list.

• Plan your budget and spending.
• Write down your goals.
• Plan how you will get customers.
• Think about what to do if things go wrong.
• Write down process timelines with step-by-step guidance.

Fact: Franchises with a clear business plan are more likely to succeed.

6. Not Using Franchisor Support and Training

One of the stupidest mistakes would be rejecting the support from the franchisor. They are the experts and are the owners of the franchise. You don’t need to create a single thing on your own.

There’s a saying in business- Don’t reinvent the wheel.

The franchisor wants you to succeed. They offer you training programs because they want to help you. They have experimented with several kinds of procedures and set up the one that works all the time.

Besides, why create new ways for the same business? Follow the instructions and avoid failure.

What should you do?

• Attend all training sessions.
• Ask questions if you don’t understand something.
• Use their marketing and management tools.
• Stay in touch with other franchise owners for tips and advice.

7. Poor Inventory and Cost Management:

Since grocery stores deal with FMCG products, they may get spoiled quickly. To avoid this, you should have a proper inventory and cost management system. Most franchisors offer this to you. However, it’s your responsibility to learn the system as quickly as possible. Poor inventory management can lead to waste and lost profits. Here are some things to follow.

• Track your inventory closely.
• Don’t over-order or under-order stock.
• Use software to manage sales and stock levels.

Also Read: How to Optimize Grocery Store Inventory Management

8. Ignoring Local Laws and Compliance:

India is a very difficult country when it comes to business. Every city and state has its laws, and you must follow them. This is to support the multicultural values of India and to support local nuances. If you’re looking to start a supermarket franchise business, make sure you go through all the local laws and compliance. Not following the rules can get your store shut down or fined.

Take Notes-

• Get all required licenses and permits.
• Follow all the health and safety rules.
• Keep up with changes in the law.

9. Weak Marketing and Branding

All franchises have marketing and branding teams, but this doesn’t mean you should stop doing it. Even with a big brand name, you need to promote your business at the local level. It’s your store, and you must market it.

What can you do?

• Use local advertising like flyers, social media, and events.
• Offer special deals to attract customers.
• Make sure your store looks clean and inviting.

Besides all this, you may ask your franchisor for marketing materials and ideas.

10. Expecting Quick Profits

Now, here is the most underrated mistake that all new entrepreneurs make. Many new owners of supermarket franchises as a shortcut to become rich. This isn’t like this! Like all other businesses, a supermarket franchise also takes time to grow.

There are so many things you need to work on. Be patient and focus on developing a loyal customer base. This may take time, but it will pay you in the long run.

Most franchises need at least 6-12 months to have consistent profits. So, your first task is to watch your spending in the early months.

Bonus Tips for Success:

1. Learn from Others: Talk to successful franchise owners. Ask what worked for them and what didn’t.
2. Stay Updated: The grocery business is always changing. So you must be flexible enough to update your business every now & then. Keep learning about new trends and customer needs to stay in the buzz.
3. Build a Good Team: Keep an open mind while hiring staff. Hire honest, hardworking, and friendly people willing to learn and adapt. Train and treat them well for the best results.
4. Listen to Customers: Happy customers go & tell others about your store. So listen to your customers’ feedback and show that you really care.

Conclusion

Opening a grocery mart franchise is a great choice to start your business. But it’s not easy. There are challenges and opportunities, financial support & crunches, laws & compliance. You need to tackle a lot of things to make your store a successful franchise. If you need assistance, consult about it with India’s most trusted supermarket franchise.

In this blog, we have discussed the top 10 mistakes to avoid when you’re starting your franchise business.

Here is a quick recap of the solutions:

• Research well about the company.
• Research deeply about the local market.
• Check your finances.
• Read the agreement carefully.
• Build a solid business plan.
• Use the support & training program given by the franchisor.
• Manage your inventory.
• Follow the local laws properly.
• Market your store.
• Keep patience for 6-12 months.

Follow all the solutions and grow your supermarket franchise business.