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The Right Way to Research A Franchise

The Right Way to Research A Franchise

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The Right Way to Research A Franchise

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  1. The Right Way To Research A Franchise Work is a major part of life and the quality of your life is often defined by the work you do. If the idea of owning and operating a particular franchise looks likes a good way of earning a living then you should learn everything about it. It will help to arrive at a conclusive decision whether the business is right for you and whether you are right for the business. Not everyone is suitable for a franchise business though it seems like an easy job. The aspirations and lifestyles of people differ along-with major differences in their attitudes and skills. Begin the research by exploring your mind first. Ask yourselves why a particular business seems perfect to you, things that you like to do and things that you hate to do. Make a list of all those things. It could be anything from loving animals to hating late nights. This will help you to narrow down to a particular segment. For example; if you enjoy reading, it may 1

  2. happen that you also have good knowledge about literature and you would do well to operate a book store. But at the same time, you hate to follow formats and want to do every little thing very creatively in your own unique way. Obviously, a fixed format business can never make you happy. It is very important to understand if you will be able to earn as much as you want for your lifestyle from this business. Some franchises will be easy to operate but the profit margins may not support your lifestyle. Sort out your own priorities and then match them to the available business opportunities. Employ as many methods for franchise research as possible: Trade magazines: Get access to some trade magazines, directories, and classifieds where you can see advertisements related to business opportunities. Reading these on a regular basis will give you a whole list of franchise business opportunities in your area. Don’t stick to the classifieds only because many of the articles discuss future plans of notable or new ventures in the market. You can get significant clues from such articles too. Internet: As in everything else, the internet is a huge source of knowledge regarding franchises. Many of the companies have information on their own websites to guide interested persons. Some of them mention the basic requirements and some just give an inquiry form. It will serve you well to remember that the franchises will present only their glossy side on the website. 2

  3. There are also websites dedicated to franchise business where you can see a short overview of the opportunities available along with details such as franchise fee, basic investment, and the number of years for which a franchise is sold. You can choose to inquire further from these websites that are often linked to franchise consultants. Internet is a good source of preliminary stages of research regarding opportunities or regarding a particular franchise Local business associations: A local business chamber can give a lot of information regarding business in your area. One can buy individual membership at nominal rates or access free guidance to the extent it is offered. People in the association are usually well aware of all the recent and future developments too. They also know a lot about the impact of current policies on the performance of the business. Things like proposed business parks or green zones have implications on the future of local businesses. These associations also have workshops and seminars by industry experts on a regular basis. These inputs and interactions can be valuable in giving directions to your thoughts. Trade Expo: Franchise expos are organized mainly to attract franchisees by getting together many franchisors on a common platform. It is a very good opportunity to compare the options available and know more about them. Most of the franchisors or senior management representatives are present and ready to interact with the prospective franchisees. During the interaction, you can get an idea of the corporate structure of different companies. One should not get too impressed by the profits projected by a franchise at a trade show. In such a place, all the competitors are vying for the attention of 3

  4. the candidate who seems to be suitable for their business. They may be trying to detract you from another interesting opportunity. Keep your eyes open for outright scams too in such a charged environment. Talking to a franchisor: Try to be as well prepared as you can possibly be before talking to the franchisor. In this way, you can know if a franchisor is giving you the right picture or trying to sell you a business that may not be right for you. You should ask about the main objectives of the franchise and see if they match your interests or seem to be selfish and one-sided. Ask if there are any conflicts with a franchise and ask how they are resolving it. Big fights for small things are not a good indication. A franchisor will give you gala plans about marketing and support for all functions but you can see to what extent he is correct. Ask him to cross questions such as the reason for the failure of franchisees. Depending upon the answer you will be able to trace double talk and that is every reason to doubt him. For example; a franchisor may say that they do extensive marketing of the products but if the reason for a franchisee’s failure is shown to be a lack of effort at marketing, you can immediately sense that something is not right. Ask him about the difficult parts of the business. Here again, you will get a rough idea of the areas which lack support. Assess whether you have the skills to rely on yourselves in such weak areas of support. 4

  5. Talking to franchisee: First and foremost, ensure that you are not disturbing a franchisee during the peak hours of business. Also, prepare well so that you do not waste too much time on preliminaries. Remember that a franchisee may not be very positively inclined towards a prospective competitor who may break off a share of his own market. Such a situation may lead him to give a negative opinion in order to discourage you. Talking to more than one franchise gives a more accurate picture as business and outlook tend to vary with each person. Be very cautious if you find more than one complaining about brand equity or awareness. Centralized marketing is one of the major supports that a franchise needs to thrive and it is a non-negotiable part of the deal. 5

  6. Franchise consultant: A franchise consultant is a person who earns commission on every franchisee that is signed on through him. Franchise businesses pay consultants whenever they are able to bring them a candidate whom they are willing to work with and who is willing to purchase the franchise and make an investment. The franchisee is not expected to pay anything to the consultant. Consultants have extensive knowledge about various opportunities, their potential, investments required, failures, the profile of franchisee candidates needed, documentation, and 6

  7. selection. They can provide invaluable guidance and save a lot of time for both franchisors as well as franchisees. It is not necessary to suspect them of misguiding a candidate because franchisors are not to be fooled and want only those candidates that can actually make good franchisees. In the long run, a consultant has to provide value or become irrelevant. Work in an existing franchise: One of the best ways is to actually get a job with a franchise that you are interested in. Get involved and get to know the actual cost of the pizza that is served. You will learn a lot like delivery schedule delays, taxation tangles, actual support available, and training received. 7