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Factors to Consider Before Choosing a Franchise

Written by: Michael Hemenway

Article Overview: Choosing the right franchising category is of utmost importance. You have to make sure that there’s enough demand for the service/product. Also, try to learn about the level of competition in that category.

Factors to Consider Before Choosing a Franchise

Starting a franchising business is one of those decisions that can change your life completely. So, you need to be very careful while choosing the franchising concept you want to follow. Here are some points to help you select the right franchising concept.

1. Be aware of your motivation: It is your motivation that will help you to decide which franchising concept you want to join. Ask yourself why you want to join that particular field. Is it because you want some change in your work environment or looking forward to more economic prosperity? You are, therefore, advised to pursue your interests and use your creativity to your best advantage.
2. Understand the scope of the concept: A clear, in-depth study of the franchising concept is quite essential. You are supposed to know exactly what you are selling. You have to see who the customers are and how much important the product/service is to them.
3. Know the market: You are required to know your market well. Is there huge demand for the products in the market? Is the demand short-term or long-term? Are there enough suppliers available? All these questions will give you an idea about how successful your franchising business can be.
4. The practicality of the concept: This is very important in case you choose a franchise where you have to produce things. The raw materials should be easily available in your area. Also, the process of manufacturing must be easy to duplicate.
5. The number of companies in the category: Another significant aspect of the selection process. You have to check out how many players are there in the market. Is there an industry leader? Is the category already saturated or is there place for more? For example, the fast-food category is saturated with established market giants. On the other hand, there is no such leader in the maid and janitorial services category.
6. The age of the category: There are some fields that are comparatively new like the computer maintenance concepts whereas food and restaurant franchises have been around for a long time. The franchisees of old categories will obviously get more guidance than franchisees of new concepts.
7. The return of profit: Some categories return the money faster while others take time. Moreover, some concepts dry up quite soon while others give return slowly but steadily.

So, choose accordingly and keep these points in mind while you carry out your research works before joining the franchising business.

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Article Tags: category 6, computer maintenance, creativity, decisions, economic prosperity, fast food, food category, franchise, franchising business, giants, industry leader, janitorial services, motivation, practicality, raw materials, scope, selection process, work environment



Related Forum Posts
Re: Enticing Franchises - Top 9 List - All Franchise listed above are in millions of dollars. Do you have the list of Franchise in thousands
Re: Info for would be franchisers... - [quote="Sebastien":1d29sdv1]Like Franchise Times, Franchise Update is a very practical magazine. There is no blah blah, just straight facts that anyone in the franchise community can relate to. I just want to mention that all these magazines are NOT franchisee oriented. I mean these magazines are for franchise professionals. If you're looking to buy a franchise, you won't find much information in there. To answer your question, getting published in Franchise Times was fairly easy. I don't want to brag too much but I think I am known in the franchise industry. I was the marketing guy at Franchise.com for a few years before joining my new company, the World Franchising Network. So people know me and I have a very good relationship with Nancy Weingartner, the Managing Editor at Franchise Times. I was talking with her at the last Franchise Expo South in Miami and she mentioned she'd like me to be profiled. I was like "ok, sure!". I like this franchise executive profile thing in Franchise Times as it is rarely BS. People are usually really natural in there.[/quote:1d29sdv1] Thanks for the follow up Sebastien! And I can't say that I'm surprised that networking with the right people and managing your relationships with them properly are the keys to being published. I guess the old adage holds true of "it's not who you know, but who knows you" that's important.
how much for a franchise fee? - Dear Colleague There is no easy answer to this question. Things to consider: [list=] The sizeof the Franchise Clent base Expected Turnover Intellectual Property costs (recoup) Number of Franchises Number of employees Original Set up costs Franchise admin costs An example: A franchise that I was involved in setting was to a simple "lawn mowing/home repair" franchise. The Franchise included national/local advertising - preparation of client lists - general admin - central accounting etc The Franchise involved 300-500 clients - and an annual turnover of about $300,000 . The annual franchise fee was $30,000. Hope that this gives you some idea Take care Ian[/list]
Re: Franchise Surveys - Another good tool to researching a franchise is to speak with their existing franchisees. This contact information is included in most Franchise Disclosure Documents. In order to get a Franchise Disclosure Document or FDD as it is often referred to, you will have to complete a basic franchise application. The franchisor will then usually provide you with the FDD at that time. Included in that book of information is a list of the existing franchisees, the contract, the investment information etc... This information is required by Federal Law to be disclosed to your prior to making a purchase. So be sure to do your research and start with the Franchise Documents to get the initial information.
Re: Info for would be franchisers... - [quote="Sebastien":2gam0klq][quote="BuzzAroundBooks":2gam0klq]Like Franchise Times, Franchise Update is a very practical magazine. There is no blah blah, just straight facts that anyone in the franchise community can relate to.[/quote:2gam0klq][/quote:2gam0klq] That is really what I look for in any industry publication. We lead busy lives and when people fill their magazines with fluff, not only does it benefit no one, but it makes us truly appreciate those that don't. Thanks!


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