Top 5 Buying Factors when Buying a Franchise - Part IISUCCESS - Most people get into franchising to be successful. They usually have a dream and are trying to fulfill that dream. Success is in the eyes of the beholder and it means different thing to different people.
In fact, according to the U.S. Department of Commerce, 95% of franchises are still in business after five years. Compare that to less than half of traditional start-ups are reportedly still in business five years later. Due to the high satisfaction ratings, it is not surprising that nearly two-thirds (65 percent) of the franchise owners said they would purchase the same franchise again.
As you can see, most feel that they are successful but you have to determine what success means to you. Your next step is determine the franchisees in the franchise that you are researching are achieving the goals that you would set for yourself and living the lifestyle that you would like to lead. If you find that only the top franchisees are successful in your mind, then take the advice of putting the franchise to the side and start looking at others. Chances are you are not going to be the top franchisee in that system. I certainly hope you are, but it is better to be conservative and play it safe.
Remember, define success and make sure the franchisees are achieving the success that you have defined for yourself.
FITTING YOUR IMAGE - Is the franchise you are researching fit your image and will you feel good about what you will be doing?
Sometimes you need to slow down and ask yourself, will you be happy with the franchise? Only you can answer this question. If you are not sure about something, then make a list of questions and concerns and do some more research. If you come to the same conclusion that is not what you are looking for then move on to another franchise. You definitely need to be happy with yourself and the franchise that you are considering, otherwise just the opposite will most likely happen. You will be doing things you do not want to do and therefore you will not do them and the business will suffer.
Do yourself a favor and ask yourself if you will be happy and do you have a good self-image of yourself in that franchise.
PRESTIGE - For some people this is a big category and for others it is not.
Some people could care less about what other people think about them and others it is a big factor. Others are easily influenced by what others think. This is what we call peer affirmation. People seeking affirmation from their peers will talk to anyone about what they are thinking about and planning to do. If the others agree and go along with it, then they will keep moving forward. If not, then that business is most likely going to the wayside.
There are definitely some very "sexy", "white-collar" franchises out there. We are always on the hunt for them, since they can be very affordable and can do quite well for the right people. However, they sell very quickly.
Some franchises do not look very prestigious from the outside. After investigating them and seeing the growth opportunities that can exist, they can become very prestigious.
Almost all clients who come to FranNet are thinking that they know the business that they want to buy. They will most always end up buying something totally different and one that they never even knew was out there. It still needs to meet their prestige factor though, whether the factor exists for them or not.
So, safety, affordability, success, fitting your image, and prestige are the top 5 buying factors of buying a franchise. All of them must be answered to your satisfaction to say yes to that business. Jot them down on a piece of paper and weigh them against the franchise(s) that you are researching. If you can come up with answers to all of them, you are most likely making a well-informed and educated decision.