Tweet

What makes a good franchise

Written by: Diarmuid Kieran

Article Overview: How to choose a franchise with a good chance for success

What makes a good franchise

Selecting a franchise to work for is a tough decision, but doing your homework and looking into what the franchise has to offer will help to separate the good ones from the bad.

Preparation in order to help you make an informed decision is key, so a checklist of questions should be drawn up so that you are confident the franchiser will be reliable and help you to operate a successful business.

There are a number of areas to examine when considering a franchising opportunity. The financial security of a franchise is an important consideration, along with how well it has done so far, its reputation, why the company went into franchising, whether a comprehensive training scheme together with supporting manual will be provided, as well as whether it can help you to obtain funding to start up.

Potential franchisees are also recommended to speak to the company's existing franchisees to find out what their experiences have been. Good franchisers should allow free access to its network of franchisees.

Doing this will enable you to find out how people who work for the franchise are treated, whether they get enough support and if their opinions are valued.

However, what existing franchisees tell you about their experiences should be regarded in the right context – bear in mind that if things are not working out well for some franchisees it could be – at least in part - their fault, so it does not necessarily meant that you will have a similar experience.

Another factor to watch out for is whether a franchise has joined up to a national franchising association or the US-based International Franchise Association. These associations are self-regulated and franchises are accredited based on a range of criteria.

For example, the British Franchise Association (bfa) says that its members have shown and will show important characteristics, evaluated on a set of criteria based on the European Code of Franchising Ethics, in order for them to receive bfa accreditation.

As such, bfa-accredited franchises are "viable and franchisable", an aspect that has to be proven through success experienced by the vast majority of franchisees over an extended period.

The operations of accredited franchises will be conducted in an ethical way and within the framework of a comprehensive franchise agreement.

Disclosure of financial and directors' records, financial projections and the identity of existing franchisees is also an important condition franchises need to adhere to in order to qualify for accreditation.

Once accredited, franchises will need to maintain their standards, as the bfa re-accredits franchises on a regular basis.

The final thing to consider before signing on the dotted line for your franchise is the small print of your franchise contract. Ensure that your agreement is a balanced document that protects both your rights and those of the franchiser. When in doubt, consult a legal adviser first.

In the end, the franchise collaboration should benefit both parties, so clear communication is important from the start.

Related Articles
  Reselling Your Franchise
  Franchising with all its Success
  About 60% of all franchise opportunities have less than 50 units.
  Why Use a Franchise Consultant?
  Paying Royalties might be the best money spent in your Business

Article Tags:



Related Forum Posts
Re: 40 cents per dollar is spent in a franchised business - Hi Kevin and John: I definitely agree that it's a personal choice, but what makes it hard is that it is in essence a business decision as well. the mixture of the two and the weighing of each aspect makes it a difficult choice for me to understand. John, what kind of things go into the due diligence part? i think there must be more beyond understanding the nature of each franchise...such as the fit of the franchise with respect to location etc. owning a no-frill pizza franchise in a ritzy lifestyle-conscious neighborhood might not be as good as say a healthy juice-bar type of franchise etc. any market research help available out there?
What makes a good franchise? - I have yet to find a comprehensive list of what makes a good franchise opportunity. What are the main components that entrepreneurs should look for before buying into a franchise? Any ideas from our expert forum members?
What is the Best Franchise? - As a Franchise Consultant I get asked this question on a daily basis. I work with clients to help them find the right franchise and through those conversations they almost always as me: "What is the Best Franchise?". There is no single answer for this question as the answer truly depends on the criteria you set as a perspective franchise owner. Meaning, maybe you want a retail location with 5 employees or a home based franchise with zero employees. Either way, the word "best" becomes relative to what is important to you. I realized quite some time ago that I could never "sell" a franchise to anyone. The only way someone will buy a franchise is if it makes sense for them & their family. Performing the proper due diligence is key to finding the best franchise for you.
How to Evaluate a Start-Up Franchise - Every mature franchise chain you see today was once a start-up franchise with just a few locations. Success didn't happen overnight and it didn't happen with good luck, either: many factors were involved to take a one or two location franchise national, even international. Without a doubt, one of these factors is the willingness of a few risk-tolerant franchisees to jump on board a budding concept and help it to grow. At least twenty new franchise concepts are being born every month, one of them which may have caught your eye. But before you buy, here are some warning signs to look for when evaluating a start-up franchise venture that looks good from far, but may actually be far from good.
Customer complaints agasint franchises - What happens when a customer makes a complaint against your franchise? For instance, let's say you own a sandwich franchise and a customer feels that you're skimping on the roast beef portion size when compared to other locations. Will the franchisor send an undercover representative/"inspector" to investigate the claim? How easy would it be for your franchise to be revoked?


Share this article with your friends. Fund someone's dream.

Leave a comment below or share on the left and you'll help support entrepreneurs in Africa through our partnership with Kiva. Over $50,000 raised and counting - Please keep sharing! Learn more.

Tweet

Newsletter

Get advice & tips from famous business
owners, new articles by entrepreneur
experts, my latest website updates, &
special sneak peaks at what's to come!

Name:
Email:

Popular Articles

Are You Listening?

Email Marketing Made Easy #11 - Avoiding Spam

Is the iPad useful? One CEO tells all ....

Suggestions

Email us your ideas on how to make our
website more valuable! Thank you Sharon
from Toronto Salsa Lessons / Classes for
your suggestions to make the newsletter
look like the website and profile younger
entrepreneurs like Jennifer Lopez.