So you want to be in business for yourself, but not by yourself. In today’s uncertain economy, it is a good idea to have someone who has your back. This is especially true if you are getting in the business for the first time. With a franchise model, that is exactly what you get – a business partner that helps out with marketing and sales, supply costs, and operations. Franchises usually have hones their business model over years and can help potential business owners get off the ground quickly. However, not all franchises are created equal. You need to do extensive research to find the one that is right for you. Here are the tips you can use to narrow your search.
Does the franchise save a solid track record?
The first thing to look for in a franchise is a company with a solid business model and reputation. All franchises claim to be the best, but you need to dig deeper into their financial statements and past history to understand how profitable the franchise and franchisees are.
Now, every franchise is going to have some franchisees that are not doing so well. But you when you look at the long-term trend and all franchisees, they should show good progress and profitable business, in general. If you come across red flags ask questions, get more documents and do thorough research before making a commitment because once you do, it will be very difficult to get out quickly.
How much marketing help do they provide?
All franchises need to maintain and improve their brand reputation. After all, this is one of the biggest benefits they provide to their franchisees. Ideally, the franchise should be a household name, like Subway or McDonald’s. This way you do not have to spend lot of money on advertising yourself. You are already going to pay sales royalty and marketing fund to the franchise, so you should make sure you will get your money’s worth in terms of marketing. In general, you should avoid a franchise that is obscure, you will only be asking for trouble.
What is the opinion of existing franchisees?
Not all franchise organizations help their franchisees in the same way or to the same degree. Check with existing and past franchise owners about their opinion. Tell them you’re thinking of starting a franchise with this company and you would value their input. You’ll be surprised how much you can learn just by calling 10 or 20 different franchisees.
If the franchises have mixed opinions about the support they receive from franchise you should think twice about joining them. If the existing franchisees have not favorable opinion what are the chances that you will succeed as a new kid on the block?
But don’t just take their feedback at face value. Ask how many years the franchisee has been with the company. Is this still the “honeymoon” phase? Has the owner been in business for 20 years? These factors change the value you should place on their feedback.
By joining a franchise what you are really looking for is a business partner who will bring complementary skills to yours. If the franchise you are considering helps you with building blueprints, staffing, marketing, purchasing and overall business advice you have found the right partner.
A good franchise organization provides full support for all of these things and typically more. You can tell pretty quickly when a franchise is good or bad by the size and quality of their customer support. Most of the time, the interactions you have with these people will tell you lot more than the shiny brochure you get from the home office.
What do you think? What other factors should one consider when looking at a franchise?
William Dawson is a franchise owner. He frequently writes about the benefit of owning a franchise on entrepreneur blogs. Check Out the Snap website to learn more about franchising opportunities.
