A franchise is a great opportunity for an entrepreneur to start a new business. But, with so many franchise opportunities, how can an entrepreneur choose a successful one?
To succeed, your franchise should offer a product or service that you support. It is also essential that the product or service is one that the public would buy. Conduct market research to determine what need exists and is unmet in your market area. Determine if your franchise choice fills this need at the right price. Also, check out competition to avoid market over-saturation. Determine if it is a recession-proof business, which offers an inexpensive good or service that consumers continue to buy in these times. Also keep in mind that a never-before-seen business will attract a lot of attention.
It’s best if your franchise is a trusted brand. A well-known name with a good reputation ensures an already-established customer base. Also, reputable franchises may be part of a national franchising association like the International Franchise Association. These associations are self-regulated and accredit franchises accordingly.
Next, look at the franchisor’s business profile and experience. Determine the amount of time the franchisor has been in business. A company that builds its business into a thriving franchise will most likely have the experience and talent required for your success. An experienced franchisor also benefits from having years of experience. They have had time to adapt and improve their business model.
Check if the franchisor’s management team is experienced and varied. Do they employ strong franchise, marketing and finance experts? Also research if the franchisor continually works to develop their product, ensuring that it meets the needs of today’s ever-changing buying public. Do they invest profits into research and development so they can continuously improve the product? Also, research why they chose to franchise in the first place.
Next, ensure that the business is currently engaged and involved in the workings of its franchisees. Do they offer franchisees ongoing support, training, research and development? These are requirements for a successful business; however, they are the franchisor’s, not the franchisee’s, responsibility.
Next, research costs. Obviously, lower costs aid in generating more profits. Make sure the start-up costs, operating costs and yearly fees are low and affordable. A business that does not require many employees also incurs lower costs.
Overall, make sure the franchise you choose suits your personality, schedule, skills, goals, budget and expected profit. Meet with other franchise owners to ask what they think about the company, to determine if your work ethics are similar and to see if they share your temperament.