Is This Franchise Suitable For Me?
How can you be sure that a particular franchise is the ideal one for you? Choosing a franchise may be a difficult and perplexing process. That is why we offer you the following list of ten steps to help you make your choice:
1. Meetings with franchisees.
The best way to learn about the franchise quality is to talk to already active franchisees. Call some of them and meet at least two. This will give you an objective idea of what the franchisor offers.
Ask them personally about:
1.1. The offered assistance when starting the business.
1.2. The customer demand and the market status.
1.3. Is the expected profit according to your expectations?
1.4. Would the franchisee undertake the same initiative again?
2. Visit the franchisor’s head office.
You should know what kind of support the franchisor offers. Meet its employees and see whether the way they work satisfies you. Most franchisors claim that they have a detailed and extensive system for supporting franchisees. Make sure that you can see what you are promised. Acquaint yourself with:
2.1. The training department
2.2. The offered support in critical situations
2.3. The products and the supplies
2.4. The IT department
2.5. The Advertising department
3. Franchisor’s financial stability
If the bigger part of the proceeds is derived from sale of franchises, this is alarming. The franchisor should be able to generate sufficient incomes to cover all of its costs. Otherwise, it is very likely that it becomes vulnerable in case of problems. Make yourself familiar with the company’s share price. The company should not have excessive liabilities.
4. The company top managers
Have they got a vision for the company’s future or do they plan their duties for tomorrow only? For how long have the managers been working with the company? What have they done to develop the company? What are their current initiatives? Are they willing to meet you and talk to you?
5. Initial training
Meet the franchisees who have already passed the latest training course and ask them:
5.1. Is the training comprehensive?
5.2. Do they feel they are trained well?
5.3. Have they got the whole necessary documentation?
5.4. What the nature of the training?
5.5. Have all necessary products and equipment for the activity been provided?
6. On-going support
Does the franchisor provide on-going and overall support, especially in the following areas:
6.1. Regular meetings.
6.2. A complete set of documents.
6.3. Site visits.
6.4. Training of employees.
6.5. A bulletin for the franchisees.
6.6. Product and equipment development.
6.7. Software support.
7. Brand popularity
The brand is of crucial importance for the franchisee. Make sure that the franchise name is familiar to the potential customers and that the brand is distinguishable from its rivals with something unique.
8. Sector
In which sector does the franchise operate? What needs does the product or the service satisfy? How big is the sector and is it resistant to recession? Are the goods and services diversified enough to find their place in the highly competitive markets?
9. The size of the franchisor
The duration of existence of the business and the number of the franchisees will show how mature the franchisor is at the market. The good franchisors have stable growth and good history of servicing their franchisees.
10. Approval process
The franchisor should have a profile the “perfect” franchisee it is searching for. What is the process of approving the franchisee’s application and investigating its fitness for the business?
