How to identify your "must have priorities" in a franchise!
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Free PDF Download 10 Costly Mistakes to Avoid When Buying a Franchise - By Jim Coen |
Franchising represents a viable approach to business ownership. For a price, the franchisor teaches its proven business model and methods to the franchisee who shoulders all operating and financial responsibilities of the outlet.
But just as franchising presents the opportunity to be successful in your own business, it's also a chance to get stung if you choose unwisely.
What follows is a list of questions that I have compiled to help you identify your “must have priorities” the answers to these questions that will help you eliminate most of the companies out there. Then, you can concentrate your efforts on the remaining companies that deserve your utmost consideration.
What is the Industry Trend?
Is the franchise in an industry that is doing well currently and is projected to do well in the future despite any economic slowdown or technological advances, or increased internet use, etc. Look at trade publications and identify the future outlook of the industry.
What is the Total Investment Required?
In general, don't expect a franchise that requires a five-figure initial investment to produce a six-figure income. As with most things in life, you get what you pay for. Look for a franchise that fits your financial situation and requirements. Identify the figure you are comfortable with investing and validate that actual total investment by speaking with existing franchisees. Remember to have enough money left to cover your living expenses during the startup prior to profitability.
How experienced is the Management Team?
Does the management team have executives with demonstrated past achievement and experience in operating the business, in the industry or for other franchise companies?
Are you comfortable with the hours and income potential?
How many hours do you need to work to reach the income level you are striving for? Are you willing to sacrifice your time to achieve your goals? Set your work schedule in your mind and look at business models that fit that potential and return the income you need or desire. If you do not want to work every weekend then make sure you are getting involved in a business that allows flexibility on weekends.
What is the Minimum Number of Employees?
How many employees are you willing or able manage, are you willing to manage minimum wage employees, managing dozens of minimum-wage employees who are constantly quitting or simply not showing up for work may not be something you want to handle. Others accept it as part of doing business.
Investigate whether the existing franchisees are opening additional units?
It doesn’t matter how many units they initially purchased what is important is if they living up to the development schedule, and if not why. Many franchisees have great intentions to build X number of units, but then reality sets in, find out what the realities are.
Watch out for the real estate Lease?
For most retail franchises, the triple net lease of the location is the biggest financial commitment, larger than the total franchise investment.
Are you comfortable with the Image & Lifestyle?
How does flipping burgers, scooping ice cream or cleaning restrooms fit the image of what you want to do for a living? Investing in a franchise will be the most important psychological and financial decision you ever make. Does the typical working day of the franchise you are considering fit your personal image and your desired lifestyle?
This list of “must have priorities” is a very good way for you to filter franchise opportunities and determine which ones warrant your consideration.
Investigating a franchise takes some time but I have seen over and over again that if you choose a franchise wisely, success is almost assured.
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Free PDF Download 10 Costly Mistakes to Avoid When Buying a Franchise - By Jim Coen |
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About the Author: Jim Coen RSS for Jim's articles - Visit Jim's website With 25 years of franchise, marketing, and entrepreneurial experience, and the owner of Franchise Perfection, Jim Coen, brings key skills to franchise consulting for those interested in buying a franchise business opportunity. At Franchise Perfection we serve as franchise consultants and advisers, “matching you with the perfect business”. Visit: http://www.franchiseperfection.com/index.htm For over 20 years Jim worked with Super Coups. which is a MA based direct mail franchise that delivers money saving coupons from local businesses to your mailbox. His responsibilities at Super Coups included: franchise marketing, franchise training, sales management, regional sales, and director of Franchise Development. Prior to Super Coups Jim successfully marketed franchises in the New England area for Uniglobe Travel Northeast a travel franchise, Merry Maids a maid cleaning franchise, & Emack & Bolio an Ice Cream franchise. Jim recently was the host of a popular radio show called “Let’s Talk Franchising” that aired on WBIX 1060 in Boston. Jim currently serves on the Board of Directors of the New England Franchise Association (NEFA) www.nefranchise.org Click here to visit Jim's website. 10 Costly Mistakes to Avoid When Buying a Franchise 6 Attributes of Franchise Systems Worth Investing In About 60 of all franchise opportunities have less than 50 units Visiting a Franchise Show is a great way to investigate franchise opportunities Rapid expansion doesnt always mean success when it comes to franchise businesses |
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