Features of a Good Franchising Business
Franchising has become a huge part of the retail business scene, with brands globally leading in terms of total franchise units. While franchisors may not always be held to the same strict standards as other businesses, one should consider several aspects before investing. Business owners looking to get involved with franchising should consider these five traits when researching different opportunities.
1) A strong Brand
With such a large number of franchises, it can be difficult for new stores to stand out. Brands that have been around for a long time and have the same name in different countries are a good place to start looking. For example, brands such as Subway have managed to expand its franchise base worldwide due to its consistent branding. However, consumers look for recognizable logos when spending their hard-earned money, so potential franchisees need to purchase a proven brand name before opening a shop.
2) Unique Location
Ideally, you want your chosen business to operate in an area with an abundance of potential customers, but at the same time not so crowded that there would be no parking space available or too noisy to allow for effective communication between staff and customers within your premises. Although demand may also come from competitors already existing, this doesn't necessarily mean your business is doomed to fail as long as you can outcompete them on various fronts, such as quality of service, instead of just price alone.
3) An Established Track Record
One of the best ways to judge a potential franchisor is by looking at their past deals. Franchisees should find out how long each company has been in business and what kind of success rate it has achieved over time. New franchise owners do not want to join forces with a company that promises it can never deliver on—they want brands whose reputations speak for themselves. Franchising is an extremely popular business structure because of its proven track record, so new store owners should always investigate companies before signing any contracts.
4) A solid Support System
Franchisees need more than just strong brand names and lengthy track records – they also require excellent customer service from day one. A franchisor should be willing to provide new franchisees with all of their resources to keep their customers happy. For example, if a company requires that its franchisees purchase a certain amount of supplies, they should have a way for those suppliers to deliver on time and as promised. If a franchisor does not have a strong support system, it is probably best for buyers to look elsewhere.
5) A Reasonable Cost
Franchise owners must consider how much their investment will set them back financially. While higher startup costs may yield greater benefits down the line, some businesses are too pricey. It's important for new business owners to see potential opportunities first before making any decisions.
The above list is by no means comprehensive, as every business situation will be unique. However, new franchisees should always keep these five traits in mind when shopping around for a new opportunity. After all, the success of a franchise depends on many factors – and those five are key ingredients towards any successful deal.