-Taru Bhatia
Specifically, franchise is all about buying the name of a brand. As name plays an important role in building goodwill that in turn attracts customers’ attention, which is an end-purpose of opening a franchise outlet/ branch. When an entrepreneur (potential investor) seeks to start a business, he/she tends to discuss the idea with many people including family members, friends, colleagues, consultants. Amid which the investor receives bundles of suggestions and advices and most of all pressurization for the selection of best franchise. Well, that give the investor less or perhaps no time to use his/her own comprehensive research. With research consists of assessment of own area of interest and capability, shuffling and studying about various brands, scope and arrangement of budget, location to target for opening of the outlet, whether location is to buy or rented, knowledge of a particular industry etc. Such points are necessary to conclude before handling your hard-earned money to a brand, which otherwise get influenced under the muscle of the brand name.
Brand name can surely invite existing customers to a newly made entrepreneur of a well-known brand, and if you are one of them then you need to revise your vision again. Name can advantage you and your sales for a limited period of time. What exactly retains the customers and franchise success is the quality of services offered by a dutiful staff of the franchised outlet. Therefore, while considering buying a franchise of a brand, broaden your vision to gain a perfect selection for your business.
Here are some points that need to be looked upon, other than the name, while investing on a franchise:
Evaluate your interest and knowledge: Buying a franchise and running it under your leadership is no difficult task if it is under the premise of your knowledge of the industry. One error which is usually committed by franchisee is getting with a brand of which they are having no knowledge. This limits the scope of the success of the franchisee it can otherwise achieve, as information about the particular industry is really helpful for business handling. Moreover, knowledge can easily be gained if it is backed by enthusiasm to learn. When an entrepreneur (investor) is getting into something where his/ her interest lies, franchising becomes indeed a pleasurable journey to succeed. Hence, you need to first find out which industry you ‘want’ to come in.
Does the brand synch with your location:
Having a location available to open a franchise business is not enough to initiate with. You need to have a wide research over the nature of the place and people residing in there. As they are your potential customers and it is important to find out their demands and requirements, as well as spending power. Take a note of this, whether the product or service you are dealing with is in demand there? Or whether it is having scope to rise in future in that particular locality? It is an imperative homework to do while choosing the location for your business set-up.
Is the business model profitable?
What is your purpose behind buying a franchisee of an already established business? Of course to gain early returns on your investments, this is why investors get into franchise business. While browsing through brands to invest into, do not forget to look at the ROI of the brand. It specifies the feasibility of a brand to produce profits after a given period of time. You can also find it out through the number of outlets the brand is managing, both via company-owned and franchised, or how fast the brand is developing in the market.
Are there any bad franchisees of that brand?
While looking at the sunny side, it is advised not to miss the reality check. It is actually essential to check the past records of the brand, you are getting partnered with, there might be something crucial for you to know. Best way to do that is by having one-on-one meeting with running or past franchisees of that brand. The experience they will share will make it easy for you to understand how well the company gel up with its franchise partners. Better get educative of the reality than being an ignorant.
Support system for franchisees
Support and training are main things with which a brand can run a productive franchise chain. It is a part of agreement made between a franchisor and its franchisee before signing up a deal. In this process, the parent company trains the management team of the franchise outlet for better working and also helps in setting up of the outlet. It is highly suggested to visit the headquarters of the brand once before taking a final decision, having direct conversation with the team is a necessity, as they are the one who would be supporting you in your business.
Getting onto the shoes of a successful entrepreneur, it is better to discover the crucial services offered by the brand to its franchisees, before and after the outlets open. To operate a successful franchise business, a compatible partner is needed to support your back. Hence, do not rush with your decision by only confirming the name of the brand, there is much more behind to explore to start a business.