How do you find a great franchise opportunity amongst the thousands advertised on the internet, franchise exhibitions and magazines?
In this article I examine the key qualities that potential franchisees should look for when evaluating a franchisor and their business model.
Is the business model profitable? This is the number critical issue that should be examined in great detail before any commitments are made. Can you see a market for the products in your territory? Some franchises only work well in areas with a certain type of demographic and in specific locations. If your demographics are wrong or you can not find the ideal location then you might be well advised to consider another franchise.
Is the market sustainable and set to grow? Many franchisees make the mistake of buying into a franchise when the market is already saturated and declining. Just because a lot of franchisees made a great profit in the past it does not mean that the same circumstances apply today. All business markets move in cycles and it is important to get in at the right time.
What do existing franchisees think? The best way to gather information that the franchisor will not tell you is by speaking to the existing franchisees. Do not only call the numbers that the franchisor gives you but call at random at least three people who have bought into the business.
Is the franchise agreement any good? Many great business models are ruined by a poor franchise agreement that does little or nothing to protect your rights. Always get a decent franchise lawyer to go through the agreement with a fine tooth comb and negotiate over any points that you are not happy with.
Is the training and support world class? One major gripe that a lot of franchisees have is that once they have paid their franchise fee many franchisors forget about them in their desire to sell more franchises. If you already have business experience then perhaps you might be able to do without first class support. For many people buying a franchise this is their first foray into the business world and therefore they are likely to fail if full ongoing support is not provided right from day one.
Buying a franchise opportunity is a great way to get started in business for the first time especially if you find an ethical franchisor. If you take proper care evaluating the business model, get the best advice and are prepared for hard work then there is no reason why you should not succeed.