16 Sep What to look for when buying a franchise?
Many of us have dreams of owning our own business. We opt for a franchise model because rightly so it offers some advantages over starting your own business venture from scratch. But buying a franchise per se is not a guarantee of success. It is after all still a business that you will need to operate and so it’s vital that you have a good understanding of the business you are buying.
First off, there are several questions you need to answer when confronted with the challenge on how to start a franchise.
Product or Service
What are you going to sell? Is there an ongoing demand for it or is it a fad that might rise in popularity while it’s new and then come crashing down? Is the product or service attractive to the people in your franchised territory? Is working in this business something you can see yourself enjoying and really putting in the hours and effort?
You need to consider all these before you decide to buy a franchise.
Aside from the business itself, you also need to know the person behind it and the system they have in place for the entire franchise
How well do you know the franchisor? What level of support and training are they offering, not just in the beginning but ongoing? What is their vision for the business? Are they just out to sell franchises or are they looking at more measured growth ensuring each franchisee is well established before moving on to the next sale? What are they doing to promote the brand and to market the business to generate sales?
If the franchise business is already established, there are also several factors you need to look into. First of all, have you spoken with exiting franchisees? What are they saying about the business, the support, the marketing and the franchisor? Are the comments consistent amongst franchisees? Remember that sometimes a franchised business can have a ‘bad apple’ and their views are not necessarily representative of the whole business system.
Most importantly, you need to know what you will bring to the table and determine right from the start how you will go about running the franchise.
What are you prepared to bring to the business? Are you willing to learn and to follow the franchisors system or do you think “I know better, I’ll do it my way’? If this is your attitude perhaps you would be better off to start your own business. Franchising as a business model is reliant on franchisees following the franchisors system and not doing things their own way.
Family also plays a big part in a franchise’s success. Don’t underestimate the time, effort and cash flow required to get the business up and running. Like all new businesses it will take time. Is your family 100% behind your decision? Without family support the challenge of starting any business is that much more difficult.
Don’t’ despair it’s not all bad news. It’s just important to enter any new business venture, franchised or non-franchised, with your eyes wide open and with realistic expectations. It’s also good to receive sound franchise advice from the experts before you buy a franchise. You can take comfort in the fact that in buying a franchise you are much more likely to succeed over a five year period than in independently running your own businesses.