Most probably you have heard of several success stories in franchising. Perhaps you have given it a lot of though and are thinking of wading into the business just to test the waters. Before you do, here are some other questions you might like to chew on just to determine if franchising is indeed for you.
Have you manage to limit you choices of a franchise to a specific product or service? You must have at least the basic knowledge on the franchise business you are planning on getting into. If you have an extensive military background perhaps a security agency franchise might be a better option for you than a pre school franchise.
Do you have enough money to purchase a franchise? Most franchise offers have a projected return of investment period. However, this does not mean that you will recoup you money on the specified time. Have the money to spend on at least three months or more on your business after the stated ROI period.
Do you have the right character for a franchisee? Franchisees often have to work within a specific set of rules. That is why franchisees have to be ready to follow the company’s operations manual by the book. If you have your own ideas and has the habit of experimenting with it, you might find franchising too restrictive for your entrepreneurial spirit.
Of course you have to do some research on your prospect franchisor as well. Is the franchise organization financially sound and stable? Is the product or service idea competitive enough to withstand changes in the market? More importantly, is the product or idea sellable in your area? It will definitely not bode well for you if the parent company goes bankrupt while your business is still up and running.
For this reason, always check the annual growth records of your prospect franchisor. Ask for the statistics on the growth of the franchise as well as the growth of the individual franchisees under the system.
How much support does the franchisor give to the others within the organization? Are they open to new ideas that might be able to gain a larger market share for the business as a whole? Do they lend franchisees a hand when they are in financial trouble? Will the franchisor be able to invest some time on you in learning the ropes in managing your franchise?
With these questions, you should be able to get a clearer picture on where you stand in your franchising plans.
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