So, you’ve considered your ambitions, found the perfect franchise, looked at how to finance it, and understood the legal processes. What follows is a checklist of important questions you should have answered before you make that final decision.
Take a look at the following questions. If you can’t answer one, then continue with your research until you know all the information you need.
- How well is the franchise performing?
- How profitable is the franchisor?
- What is the growth like within the industry?
- What are the development plans over the next five years for the franchise?
- Who are the main competitors and how strong are they?
- How well does the product or service sell?
- What are the unique selling points of the franchise’s products?
- How competitive is the pricing of the product/service?
- Is the competition strong for these types of products?
- How does the franchise market its products or services, how does this compare to others?
- Are exclusive territories offered?
- What is the sales opportunity within the area?
- Are the sales targets and all the payable royalties reasonable>
- Are the renewal, termination and transfer conditions reasonable?
- What inventory do you need to purchase from the franchisor?
- How thorough is the initial training?
- Is ongoing training provided?
- Is there help to find site selection / lease negotiations or store layout?
- Are there finance options available from the franchise?
- What collective purchasing power has the franchise got?
Take some time to consider what franchising can mean to you and your life. Be honest with yourself about franchising as a whole, and the particular franchise you want to invest in.
It’s a big decision which will change your life.
If the potential franchise only seems interested in taking your money and not supporting you to develop your own business you should be prepared to walk away. You are looking for a franchisor who is passionate about supporting you to build a successful franchised business which will be ultimately beneficial to both parties.
That’s the end of this brief guide on franchising.
If you are interested in finding out more then take a look at our news and industry articles.