Key factors to be considered before choosing a franchise
Franchising is no doubt one of the best ways to start your own business. However, it is not all that simple to choose the right franchise. Choosing the right franchise is crucial for the success of your business. The following tips will help you make the right choice:
How is the franchise affected by economic cycles?
This is really important. You must choose a franchise that can give you a good return even in a slow moving economy. There are franchises that do really well in an upbeat economy but then suffer badly in an economic downtown. You must choose a franchise that is stable.
Is the franchise dependent too much on the location or other demographics?
It is always better to choose a franchise that is universal in nature. A franchise that is dependent too much on the demographics of a certain area might land you in trouble if you choose the wrong location or if there is a substantial change in your area.
Will the franchisor survivor in case of a management change?
Many franchises are too much dependent on the decisions of the owners, particularly the smaller ones so it is advisable to avoid such franchises.
Is the franchise managed professionally?
You must find out how professionally managed the franchise is. You must choose a franchise that has a good management structure in place to develop the business further. It is important that you have a strong franchisor team as this will determine the success of your business.
Is the franchise audited and piloted?
One of the best indicators of a good franchisor is its affiliation and membership with the British Franchise Association. Check if the franchise is audited for its business to minimise your risk when investing in your new franchise.