Before buying a franchise business there are a large number of things to consider. This article provides you with 10 factors you should look for from a franchise business that will help you avoid some major pitfalls.
This article is also known as Avoid RIYOT, abbreviation abbreviation RIYOT REPENT IN YOUR OWN TIME. The point is, that if you choose the wrong franchise in a hurry you could regret the decision for a long time to come. We hope that by reading this article, we can stop at least some people make mistakes very costly judgments. Hope you find this useful.
This list has been compiled by a highly experienced franchisee. All information here is based on direct experience, near misses and the stories we hear from the "trenches".
- How to franchise your business will be affected by economic cycles? (For example, for instance when a general economic crisis or recession worse long-term).
All economies are cyclical and you will realize from experience there are times of prosperity (which can last many years) and sometimes global factors, national and local economies resulting decrease (which also can last many years).What is the impact of economic changes on the prospective business? Usually, luxury products and services, non-essential services and goods will suffer more than what is seen as cost savings or essential goods or services.
- How is the franchise attached to the regional / socio-economic mix?
Most franchisees start of a business in a single area. The success of that initial surgery and may be the next pilot is often the basis for the entire franchise operation. But the business started in your area and will operate the franchise in probably will be different (different mix of houses for business, blue collar to white collar workers, high-income to low income, different levels of competition, etc.). Evaluating the impact of the differences in potential revenue.
- Is a franchise operation as a whole to survive if there is a change of ownership or management change?
Some franchise operations succeed only because of the influence of the founder or current owners or management team. What will be the impact of changes in owners, business managers? According to your products and operational models will work equally well regardless of who owned / operated the franchise? Changes in management may have the effect of changing a business that is run into bad business is run.
- Does the franchisor have the right management structure to be proactive in developing a business?
New ideas and approaches to business is an important and necessary function of the franchise sent to long-term viability of the franchise. Asked about their experiences and how they intend to remain competitive long term? What ideas they have for the product / service growth? What would you have flexibility as a franchisee to change the product mix strategy, marketing or price?
- Profit margins must be high and above the normal level if you will be able to pay the franchise fee and ourselves.
When reviewing the financial projections for the business you will need to set a net profit after each paid a franchise fee. Often the figures quoted that looks great, but not including the franchise fee you will pay monthly. Depending on this franchise to include both the number of fixed and percentage fees based on turnover.
- Products or services offered from the franchisor must have some element of uniqueness about them exclusive to the franchisor and ideally patented.
If your franchisor does not offer a unique product or service, then it is very likely you already will have or soon will have direct competition from other franchises, independent retailers and chain stores. Open magazine franchise and you will see that many industries already have many franchise business in it (eg, lawncare, property rental, food outlets etc) and they offer very similar products or services. This factor when looking at income levels quoted by your franchisor, if a competitor next week will open your income potential halve?
- Supermarkets are a good idea for most of us but you do not want to be in competition against them.
Supermarkets and big chain stores will reach into the market and a niche that has a high level of profitability and / or will build subscriber numbers (such as photo processing, dry cleaning, newspapers, books, DVDs, etc.). If there is enough profit supermarkets will see every business opportunity and often will have the resources to enter the market. Many small businesses have closed because of the power of supermarkets. Could this happen to your franchise?
- A good franchise will allow you to speak with one of the franchise he has been up and running.
A good franchise will give you a list of all franchises currently in operation and you choose who you want to talk to. Because the pressure of doing business, not all existing franchisees will be willing to look at every potential new franchisees. Bear this in mind, but try and talk to as many as possible ideally 5 or 6.
- Piloted and fully audited franchise operation provides the best opportunity for success.
You can also help reduce the risk of buying and operating a franchise with a look at an accredited BFA franchise. For further details on membership status, please see the BFA website (http://www.thebfa.org/standards.asp). But this does not guarantee success and vice versa franchise less proven to work well. In addition to the more established franchise is the more premium you must pay for it.
- A good franchise will encourage you to visit their HQ, they will encourage you to work with them for a day and they will give you all the information you requested and will not bother you for a decision.
But the franchisor Ideally you will stage further. If they really want you to succeed they will vet your suitability as a franchisee (not just check you have the money!). We would advise you to have a credit agency to check the Board of Directors / Franchise / key finance staff.
Please NOTE. This is not a complete list of factors that make a good franchise, but will give you some key areas to look. Take your time, take care and take advice (avoid R
Tidak ada komentar:
Posting Komentar