Selecting the right franchise business

Posted by Gd Goenka Toddler on April 3rd, 2019

Investing in a franchise business is like starting any new business. You need to consider some factors that are crucial for the success of the franchise operation. Factors like the demand for the products or services the business offers, the competition in the market, the level of support you will get from the franchisor, and the reputation of the brand you are intending to invest in are some things that you should pay attention to.

The Demand

You need to assess the demand for the services or the products that the franchise offers and whether the brand will bring in customers or will you need to create a market for the product or services. For example, if you are investing in a primary school franchise, you have to check for the demand for the school in the locality where you intend to start and how reputed the brand is to get the children for the school.

Competition

The level of competition also needs to be checked. If it is a primary school franchise, you need to know about the number of schools in the area and how well-established or widely recognized the schools are, as well as some information about how your franchise may fare against those schools.

Your ability to operate a business

You need to know your ability to run the business. You will have to work like an entrepreneur, which means that you have to work with a team and staff. Coordination with the franchisor is also required. You have to meet the requirements, like having a suitable location for running the franchise and trained staff. 

Name Recognition

Buying a franchise means that you are associating with a franchisor’s name and brand; an established franchise with a well-known name and good reputation draws more customers than a relatively new or unknown franchise. 

Reviews about the franchise

Checking what previous franchisees have to say about the franchisor can also help you make a wise decision. If it is a primary school franchise, know how the franchisees are running the schools and what their reviews are about the franchisor.

Training and Support Services

Know about the training and continuing support that the franchisor provides to the franchisees. The training should be effective for successfully running the business. In the case of a franchise school, you should know whether the franchisor provides training for the teachers. Franchisor’s support for the study materials and curriculum planning may also be needed. 

Franchisor’s experience

Know about the experience of franchisors in selling goods or services and managing a franchise system. Find out how long the franchisor has managed the business. If the franchisor has little experience in managing a chain of franchises, you should be prepared to give extra efforts to see the business become a success. 

Growth of the franchisor

Looking at the growth of the franchisor and the franchisees will give you a better understanding of the business. A growing franchise system means that the franchisor has a name and brand recognition and may enable you to attract customers. However, growth alone may not ensure that you will be successful in your effort. You have to act like a wise investor to get better returns on your investment.