Owning your own business can be all that you hoped for, but there is so much to do and learn.
There is a way you can be your own boss and get lots of support in nearly every aspect of opening and running your new business – become a franchisee!
Success rates of new franchise businesses are greater than the success rates of new small businesses that are not affiliated with a franchise – deciding to look into franchise opportunities is an excellent way to tilt the odds of success with a new business in your favor.
Five Key Elements of a Sound Franchise Investment
There are five things to look for in a franchise opportunity. They are,
- Franchise longevity
- Does the franchiser prepare you for success?
- How effective is the support once you open?
- Does the franchiser have an effective marketing campaign?
- How much money can your franchise earn for you?
It may seem a bit strange to put how much can you earn at the bottom of the list, but the preceding issues help decide your top earnings. On surveys, most franchise respondents list earning potential as the first thing to look at. But, if there is no sound marketing program, are you ready to create one? It will likely cost more than your franchise depending on business type. Let’s explore each list item independently.
Franchises that have been in business for some time may be better opportunities than a recently introduced franchise opportunity as the company has gone through its growing pains and its systems and programs are tested and redesigned if necessary.
Does the Franchiser Prepare You for Success?
The question may seem over-reaching, but it is the reason people buy a franchise – to reproduce a successful business template. The franchiser should offer the following services to you,
- Great training for new unit opening support
- Excellence is front line support
When evaluating a franchiser’s offer to you, make sure that all parts of the franchise opening and continued running are part of your first and ongoing training. It is important that you discover before you buy, how well the systems recommended or mandated by the franchiser work.
Before you ever open your franchise’s doors, there is a lot of preparation work to do and your franchiser should be aiding you in tasks such as,
- Site choice
- Lease negotiation
- Hiring and training staff
Another thing to look at is does the franchiser use select vendors to maximize collective purchasing power? Frequently, money saved by collective purchasing can lower or in some cases eliminate ongoing royalty fees payable to the franchiser.
Excellence in Front-line Support
The people helping you prepare to launch your new franchise opportunity must know all there is about running a new franchise unit and be available to help you when you need it. Franchises that send support for the opening and first few weeks in business are great.
How Effective Is the Support Once You Open?
Even though your opening was smooth as silk, it is likely that your need for support continues as you are confronted with problems and issues common to most businesses. This means that you need to be sure that the franchiser has a well-developed learning system that offers you ongoing support, help and preparation for dealing with issues as they arise.
How Good is The Marketing Program?
Franchise prospects for success correlate with the effectiveness of marketing programs run by the franchiser. The best franchises offer marketing support for your grand opening and ongoing business.
The purpose of grand opening and ongoing marketing is to get new customers in the door every day. Without customers or clients, your franchise is worthless.
How Much Can You Earn
Some companies that sell franchises publish their earnings in Item 19 of the Franchise disclosure documents. However, even if this data is not published, getting it is easy. Call up some franchise owners, not only those recommended by the company you are exploring an opportunity with.
Oh, by the way, that is the secret – talk with folks who own the same franchise you have an interest in.
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