Franchising opportunities abound in the modern world, and for good reason. Franchising is the epitome of the tried and tested formula, where you can use a formula that has worked well for many other people in the past. You can use this idea and all of the copyrights, setup, trademarks, etc., and for just a small fee, usually paid on a monthly basis, or simply a start-up cost. Some franchise companies have very low startup costs and just hope that you will be making lots of sales so you will be purchasing lots of their product to sell in the future.
Evaluating franchising opportunities is not something that should be done lightly. There are, unfortunately, a number of franchises that do little to help the franchiser in the long term and are more in it for the startup payments paid to them, or they have ongoing payments that drain your profits. It’s always the case that with a new franchise you need to weight up what you’re getting from the amount of cash you need to outlay (both as a startup cost and an ongoing cost). Remember with contracts you could be tying yourself into using the company’s products for your business when other options end up being a better option.
Don’t worry – the vast majority of franchising opportunities are just that – great opportunities for you to open up a great business in your own area with lots of the really hard groundwork already having been completed for you. Banks and investors are more likely to lend you the startup capital as you have a business that they understand and have seen working in other locations. The franchise company has, in many instances, done a lot of market research which you can lean upon and use in your loan application, and indeed in your day to day business dealings.
The experience of the franchise operators is very important. It pays to see the experiences of previous franchisers, and how they fared. There will be some who failed through their own inexperience (and sometimes these are the most vocal of complainers), but you should check out all comments and thoughts on the franchise operation. If there are too many people crying foul, it may be best to move on to a more respected franchise operation.
Franchising opportunities that seem to offer too much may be just that. Franchise operations are in it for the money just like you, but the best franchise companies know that they need to keep offering a healthy profit to the people who take up their businesses if they are going to succeed. If a franchise operation has been running for a number of years and has had no significant problems, it is safer to trust than one that has just arrived on the scene with that new killer pitch.
Weigh up your franchising opportunities carefully – franchising is a fantastic choice to get yourself a successful business, and choosing the right opportunity is the first step on that ladder.