Few years back job was considered to be the only secure occupation for youngsters. Parents wanted their kids to take up a job in public or private sector and get settled in their lives. However, things are little different today. These days’ parents as well as kids themselves are conscious enough to make a fast move in their careers. As per the prevailing trends young graduates initiate their careers with jobs and within few years of experience they prefer quitting their jobs and moving on to entrepreneurship. Though jumping onto the entrepreneurial world is not that easy but franchising is playing a significant role in making youngsters successful entrepreneurs.
Franchising is a proven business model and is preferred over independent business set up. Taking up a franchise also involves lot of careful study and research before zeroing down on a particular industry or brand. An aspirant may have finances, management skills and even the capabilities to run a business but it will all be useless if the aspirant does not have the passion for a particular business. Therefore, it is imperative to select an opportunity suited to ones passion and capability.
Steps for selecting the right franchise
Investing your hard earned money in a business which proved good for your neighbor or friend etc may not be the right motive for taking a franchise. Rather one should always take a franchise which interests and involves him to the core. Here are few steps for securing future while investing in a franchise:
Motive behind taking up a franchise: Every person has different intentions for taking a franchise. Some have passion about a business opportunity and want to live and breathe this passion every day but some others purchase a franchise as a pure investment objective to increase their earning potential. Aspirants should firstly understand their motive for taking a franchise. Passionate aspirants need to search the right opportunity which meets their passion and then consider the budget. However if aspirants are more interested in becoming an investor (do not want to be directly involved in the day to day running), then they need to filter the search for franchises that suit their budget.
Understand the demand and the market: Before zeroing down on a franchise, aspirants should always try to foresee the future of the concept in a particular location. Many established franchise businesses conduct a research and plot the location of their franchises according to the footfall. However, not all franchisors may help aspiring franchisees in this. Therefore, it is a must for them to do their own homework. Aspirants need to investigate the area, its demographics, and footfall and find out if the location would be suitable for a particular franchise. Moreover existing players in that location should be kept in mind to gauge the competition.
Find the specialty of the concept: It is essential to invest in a franchise which stands out from its competitors due to its USP. It may include the positioning, the type of products or services or the unique way of serving clients/customers. Aspirants should never take a fad or trendy franchise which is not long lasting. Moreover franchisees should find out all the USP’s of the brand. A brand needs unique selling points and other marketing strategies to maintain and increase its demand. Consequently, a brand with USP ensures that a franchisee will also be able to attract customers by its uniqueness.
Consider break-even and ROI: Before investing in a franchise the break even and return on investment (ROI) should be discussed and analysed. Many aspiring franchisees enter franchising with big dreams but the reality should be kept in mind. Miracles do not happen overnight. In the same way it may take a long time for a franchisee to break-even and start making profits. However there are certain franchise concepts which have breakeven early. If a franchisee is looking to make profits in a short time then such franchises would be more suitable.
Speak to franchisor and existing franchisees: It is always preferable to conduct a research of franchises which have been zeroed down. Franchisors may be asked a few informal questions regarding their relationship with older franchisees. Franchisee’s length of time in the business can suggest whether other aspirants should invest time and money. Franchisees been in business for a long time (five years or so) indicate that they enjoy their work and profits earned.
Franchise with values: More and more businesses are becoming aware of the need to be environmentally and socially sustainable. It is important to research the values of the business and be sure that they are in accordance with the values shared by the aspirant. This can include sponsoring community projects or sports teams, refusing products that test on animals or supporting fair trade etc.
Get expert advice: Investing a large amount in a franchise can be risky if the aspirant does not take any expert advice from franchise attorneys, experts or advisors. It is advisable to consult a franchise advisor or attorney before buying a franchise. One can also get information from different franchise websites and franchise expos, which are held regularly and offer a great opportunity to network with franchisors and franchisees. Searching on the internet and then meeting concerned people in expos is a good way to solidify findings and getting more knowledge about the concept.
Selecting a franchise is a tough decision and needs careful study and insight. Nevertheless keeping these guidelines in mind can surely turn an aspirant’s dream of running a successful franchise outlet into reality.
