Consider These Pointers while Deciding the Right Franchise
Franchising has proven to be a one-stop-shop for most of the individuals that look to start a new business. Considering the fact that the option of franchising is available in almost every industry one could think of, it creates a lot of opportunities for budding entrepreneurs and franchisees.
But how can young and budding aspiring franchisees narrow it down and ultimately decide on the best option for them?
A franchise-based business comes with several benefits like a proven product or service. Franchisees have the option to be a boss and put in efforts in order to enhance productivity at their outlets. Thus, picking the perfect offering for your passion and skill set turns out to be of utmost importance.
A franchisee usually needs to look at several aspects of franchising business, including franchise costs and support offered by the franchise. Therefore, for getting an idea of how to begin, bombard yourself with a few broad questions that can eventually place some parameters on your franchise search.
Everyone has a different set of personal goals for turning into an entrepreneur. Thus, it is recommended to ask yourself what your goals are. Get things clear whether you want to make more money from the business, spend more time at home, or are willing to move forward by taking an entrepreneurial step in your career.
What are your Strengths?
Most successful entrepreneurs and franchisors claim that it’s essential to be aware of your strengths first making a move, especially in the franchising industry. Successful franchisors enjoy their work and do things that suit them.
If you don't have the required strength for running a particular franchise business, you can look for ways to outsource or delegate those aspects where you might be lacking as an individual.
In fact, it's a wrong belief that franchisors and franchisees need to be experts in everything. Rather, one should just find opportunities to outsource roles and duties, which require a different set of expertise. In this way, you as a franchisee could focus on the core part of your business more clearly than ever, enhancing productivity at your firm for the future.
What Role do you want to play in the Business?
Globally, franchisees could be categorised in two ways: Absentee Owners and Operators. An absentee owner usually hires staff and employees for managing the business on a daily basis whereas an operator gets directly involved in running a franchise business.
What is your Investment Budget?
Franchise costs are known to vary greatly that depends on the specific business model and the industry. While some franchise can be acquired at a pocket-friendly rate ranging between INR 2-5 lakhs, others might require more than INR 50 lakhs for investment.
For example, if you are willing to start a food franchise, obviously the costing will be on a much higher side than any other home-based business. It is simply due to the fact that franchisees need to be occupied and ready with new-age technology, tools, and types of equipment that are necessary for running a food-related franchise business.
Did you review the Franchise Disclosure Document Correctly?
Existing franchisees suggest that it is very important to go through the entire franchise disclosure document (FDD) thoroughly. Some of the important segments which need close attention are:
- Resource Strain & Turnover: This section of the FDD provides information on the franchisees that are associated with the brand and also the ones who have exited the system. You could have a word with those franchisees, asking them to share their experiences, which might prove helpful to you.
- Current or Past Litigation: This section of the FDD highlights whether the franchisor or any associated person-in-charge have been involved in bankruptcy cases, relevant to the brand or their experience as a franchisor. It will help you to analyse the level of dissatisfaction with the system or a franchisor's level of seriousness for upholding its system standards along with benefiting all the franchisees.
Thus, never fear to ask yourself such questions. Remember that these questions will lead you to some specific answers that will help you understand your actual mission and goal as a franchisee.