A franchise business can be a great opportunity and a chance to run a business with some support. Whether you’re already in business or a first-time entrepreneur, a franchise can be the right choice. But how do you know if you have found the right franchise for you? A good opportunity should have a few signs.
What is the potential for growth in the industry that you’re considering? Some franchisors will offer some market research on their industry, but don’t rely on this information alone. Do your own research too to make sure you’re well informed about the earning potential and things like trending business for sale locations. It’s just as important to understand the growth potential in your local area too. For example, craft beer might be the most significant trend in franchising, but if your neighborhood already has several popular craft beer bars, this won’t be a good opportunity for you, as the market is already saturated.
Look out for signs of an ongoing increase in the number of franchise units, which shows that a franchise is doing well. One big benefit of buying a franchise over starting a business of your own is that you have the franchisor’s name and brand recognition. The more units that are open, the more brand awareness potential customers will already have.
Strong Support From The Franchisors
What kind of training and assistance does the franchisor offer to help you get started? What help will you get to keep it running in the future? Even a small franchise system can be a good opportunity for you if the support is good.
Find out about the people who are behind the franchise and what their experience is in franchising. Running one successful coffee shop is great, but it’s quite another skill to grow a coffee franchise. How long has the company been franchising? Try to meet with the management team, and the franchisee support staff to get an idea of what it might be like to work with them.
Marketing & Advertising Support
What kind of marketing and advertising support does the franchisor offer? Is the support available for current marketing trends? You will probably have to pay a monthly fee for your franchise, so make sure you’re actually getting your money’s worth for what you have to pay.
Meet and talk with both current and former franchisees to try to get some feedback. If all the franchisees are unhappy, or even worse, they are suing the company, this is of course a very bad sign and you should steer well clear. However, if you find that the franchisees you talk with love what they’re doing, then this is a good sign that it’s a good opportunity.
Can you realistically make a living from the franchise? To find out if you can, you will need to estimate your potential earnings. Some franchisors will provide information on average earnings, which can be helpful. For others, you will need to work out an estimate for yourself by talking to other franchisees.