So many franchise opportunities out there as they announce themselves on your radio and television. Each one sounds like the ideal dream…until it isn’t. There are many aspects to discover when analyzing if a franchise business is all that it appears to be. Prudent vetting helps to make a clear picture of how perfect a prospective franchise company might be.
The perfect franchise business should offer these 5 things to be considered in your final decision-making process:
1. The Franchise Business Offers a Proven System
When evaluating Franchising, it is critically important to find a franchise opportunity with a proven track record and robust business systems. The franchise should provide a clear and identifiable record of success through their documentation and testimonials from current franchise owners. Having a proven method eliminates the need to “create everything from scratch” or “reinvent the wheel.” The franchise system will provide everything needed from start-up through on-going operations of the business for the agreement’s life so you can focus on running the business versus developing it.
2. The Franchise Business Provides a Strong Operations and Marketing Platform
Building a franchise brand and name awareness is essential for a start-up business in a new territory so the new business can gain customers quickly. Having marketing strategies in place before opening the company creates success in the beginning and throughout the company’s life. Franchises provide multiple marketing platforms in direct marketing, media marketing, and social marketing. These platforms are ready to use and ready to implement, eliminating the need for someone to create them independently. Hearing these platforms’ success from current franchise owners gives you confidence in the ability to be successful in a local marketplace.
3. The Franchise Business Provides Significant Training, Systems, and Support
The ongoing support and training provide the cornerstone for growth, giving the franchisee the tools and tips to expand its customer base and therefore build market share. The responsibly grown franchise system provides value to its franchisees by teaching them how to get and keep as many customers as possible, who consume as many products and services as possible, and as often as possible. Without an effective training system, a franchise owner will not realize the success they deserve.
Interestingly, most new franchise owners have little experience in the business they purchased, which makes franchising so powerful. With minimal knowledge about an industry, a franchisee can become an expert in their field in a short period, resulting in a very successful business. Not only is the training so practical, but so is the on-going support from the franchise company. In most cases, the support is nearly 24/7 through meetings, phone calls, conferences, and on-site visits.
4. The Franchise Business Promotes a Franchise Community
An often very overlooked advantage to Franchising is developing life-long relationships with other franchise owners who thoroughly understand the challenges and successes of the business. Those relationships are fostered in the very beginning during the “due-diligence” stage through the life of the company. Annual/regional meetings and video chats all provide an avenue to build solid relationships. Forging those local, regional, and national relationships helps generate success because you, as the franchisee, can gain knowledge from the experiences of multiple sources.
5. The Franchise Business Provides a Strong Investment Opportunity
The drawback for some in looking into Franchising is the up-front investment required to purchase a franchise. In a real comparison to independent start-ups, Franchising still has the advantage. While it is true that an independent start-up may be a lower investment, the revenue produced by the franchise is significantly higher in the first few years, which ultimately results in fewer business failures. There are many critical steps to be completed in the early days of a business. Having a clearly defined financial plan is essential for success.
Even though there are no guarantees in buying a franchise, it is possible to identify the business’s initial and on-going costs. Developing a viable business plan and proforma is very reasonable to accomplish. Sharing valuable experiences and financial details is typically done through the assistance of current franchise owners. The Federal Trade Commission regulates what franchise companies can say about earning claims (how much money can I make). However, franchise owners are not bound by those regulations and so they can share all their financial information and details with qualified prospects. Building equity, the day you sell, is overlooked as a massive advantage in franchising. For years, many successful Franchise owners have enjoyed building significant wealth through their activities.
- Using the above criteria will help you get closer to finding that perfect franchise opportunity for you and avoid common mistakes made along the way. The franchise industry is very crowded with incredible and not so incredible opportunities. A strong franchise advisor can coach you through the process to weed through the many business opportunities to help determine which ones should hit your shortlist for vetting.
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Franchise business ownership opportunity doesn’t have to be a dream. I help make it a reality for clients everyday and you could be next… if you’re willing to take that first step towards your future.