Before stepping into franchise business, it is advisable for ambitious entrepreneurs to do their homework in advance so that it does not leave any room for rectifying mistakes at a later stage. For any individual who dreams of taking up the franchise opportunity rights, it is imperative to conduct an extensive market research so as to avoid any pitfalls in the business. For reviewing the franchise business, the franchisee must conduct meticulous research by going through franchise journals, newspapers and magazines, browse internet, visit franchise exhibitions and consult a franchise professional to discover the right franchise opportunity.
When selecting a franchise of a particular brand, it is important that you carefully figure out certain factors such as type of franchise, franchisor’s background and the level of training you will receive. Prior to contacting certain companies, the individual must frame certain questions for the franchise company to review the right opportunity. Let’s follow some key guidelines in detail:-
Company’s background: How established is the company? When did it start offering its brand’s franchise? How many franchise stores it has? All of its stores are running successfully or not? Will it be providing any support in marketing and advertising the brand?
Franchise opportunity: What sort of franchise opportunity is it offering - business format franchise or minimum guarantee? Is it giving any area exclusivity or not? Is it offering single-unit or multi-unit franchise? In which all retail formats, the brand is present?
Industry future: While doing research for the franchise you decide to take up consider what future does it offers? One must keep in mind long term prospects of the franchise.
Initial fee: How much is the initial franchise fee? How much royalty (ongoing cost) will be paid by the franchisee?
Franchise recruitment: On what basis, the franchisees are selected? What would be the minimum educational and professional qualification required for taking up the franchise?
Training: What sort of training and ongoing support, the company will be offering to the franchisee for operating the unit?
Funding the franchise: Will it also be offering any support in funding the business or not? What type of monetary support does the company offers to the first time franchise buyers?
Location: Will it assist the franchisee in selecting the location or not? How much support it will offer in negotiating the rentals for space?
Visiting the existing franchisees: An aspiring franchisee can visit the franchised outlets of the company and can ask the existing franchisee as how much fee he/she had paid to the franchisor and how satisfied they are with the system?
Term of the agreement: What will be the term of the agreement? Talk about which all terms and conditions are usually negotiable in the agreement?
Consult a franchise specialist: If you are taking a franchise for a first time, ensure that you consult a franchise professional in advance. Before signing the document, one must thoroughly read the document and understand all the obligations. If you do not understand any of the given terms then, one must endeavour to consult a franchise lawyer.
Attending franchise exhibitions: Franchise exhibitions provide a horde of opportunities to the first time franchise buyers. It gives the opportunity to the franchisee to talk to many franchisors.
Never hurry while buying the franchise. Purchasing a franchise business does not necessarily assure success. All you require is hard work, commitment and determination to make your business a success.
