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In our previous article on franchising, we highlighted how franchise business model can provide a proven business format.
For entrepreneurs, franchise business offers great business opportunities and access to expert professional advisers.
It’s a better way to start a business off established brands and reputation without spending too much.
Franchising is not really a new business model, but the fact is that many aspiring entrepreneurs are still sceptical about it.
How to identify a good franchise business model
You will all agree with me that the past couple of years have not been particularly an easy ride for businesses.
The downward turn in the market and loss in confidence by both consumers and lenders hit many businesses hard, with many unable to survive.
Below are some key steps to follow in identifying a good franchise.
#1]. Research the business and get to know its success rates
Do you how work really well. Make sure you speak to existing franchises. You want an extensive list to choose from.
Speak to both successful and the less successful franchises to give you a much more rounded view. Ask for success rates of other franchisees. There may be failures but the important aspect is to understand why.
#2]. Understand the business and the people involved
Another thing is to make sure you understand all the business operations and what is involved on a daily basis. This will give you a better inside understanding of the business. It’s better to know where you are going than to get there regretting.
Don’t underestimate the importance of meeting the people involved at their office and finding out who you would be in contact with and what their experience in franchising is. Please check out our article on how to easily get your new business off the ground.
#3]. Investment level and costs
In franchise business model, the levels of investment range from smaller amounts that you may already have available to larger amounts that you may need a bank loan for.
It actually depends on the kind of franchise you want to go for. It’s also essential to understand what costs are involved, both up-front and ongoing and importantly what you get for those costs.
You will need to make sure that you are happy with the commitments needed for this news business. You will also need to consider the support and understanding of those around you.
#5]. Professional advice
There are a host of accredited professional advisers that specialise in franchising, including consultants, accountants, solicitors, banks and even media.
These advisers are invaluable in making sure that you are taking the right steps and don’t miss any vital information. When it comes to reviewing the franchise agreement make sure you go to a franchise solicitor. It can save you a lot of money in the long run.
Also, don’t forget to search online for objective advice and numerous educational and advisory resources.
Please do check British Franchise Association (BFA) website for more information on franchise