Like a bird returning to its awaiting offspring in the evening, the world is slowly returning to its normal pace. True, the pandemic has left many a business distraught, but the never-faltering willpower of man is sure to bring it back to its feet. Amidst other businesses, the franchise industry is also gaining steady footholds. And the ever-increasing market means more options to choose from, ergo, more competition. So, today we will talk about the best method to choose between multiple franchise options.
When individuals think of starting a business, investing in a franchise is the most preferred option. But the biggest hurdle lies in the multiple choices available across different industries to choose from. This could be a make-it-or-break-it situation, and one needs to be mindful in making the choice. Considering a few options might make the process streamlined. While being one’s boss the decisions need to be carefully thought, out and executed with dedication, passion and set of required skills.
It is extremely important to be transparent about the goals, which will lead to paving the way ahead. Individuals may vary in their vision and expectations. For example, if you want to devote all your time to this business or be partly involved. Is making money your priority or spending more time with family? By addressing such questions, one is clear about the core personal priorities, which then helps in decision-making.
2. Focus on your Strengths
Everyone has something unique to their personality and some set of acquired skills. While considering investment options, one must self-evaluate their strengths and devise a strategy to build on them. This also helps you invest in a format that is best suited to your capabilities and reduces the chances of confusion and stagnancy.
3. Your Role in the Franchise
Investing isn’t the only aspect one needs to ponder upon. It is also important to comprehend the role that one wishes to play in their business. There are two approaches to this. One may be to be the absentee owner and hire staff to manage while devoting time to personal and other pursuits. The other approach requires a full-time commitment that also provides excellent management and ownership skills.
4. Investment Budget
Every franchise option has different requirements and hence can lead to various figures. Some industries like food or fitness may need more investment as a setup along with staff to manage is required. Businesses that are based out of home or business-to-business models require slightly meager investment in comparison to the outlet based. A check and then a decision on finances will enable the seamless choice and flow of investment options.
Once there is a clearer perspective on which recourse to opt for, then it is most important to contemplate certain elements about the two franchises that you are confused about. The best way to head to this is to Research, Compare, and Conclude. Research plays a principal role in the decision-making process of owning franchises. Here are some useful full tips while researching shortlisted franchises by you:
- Does the brand add new franchisees every year?
- Have they any franchises and how many?
- On average, how long does it take to become a profitable franchisee in the shortlisted franchise opportunity?
- What methods are used for procuring the franchise?
- What type of technology does each franchisor provide?
- How content are the franchisees? If not why?
- What does the competitive landscape look like?
- According to the demographics in your area, is either franchise a good opportunity?
Effective methods to research a Franchise
Planning to invest in a franchise is a major decision is a pivotal factor to influence your financial and professional goals, and an in-depth analysis of the ideal franchise is a must for it. However, it seems like a quick search on google and going through some articles will answer all your questions about maybe someone who owns a franchise. The truth is far from this as there is always attached to a fundamental bias that will overshadow the essentials that you need to consider before investing your savings into a new business opportunity. There are multiple platforms to garner information but one has to always be cautious about the information available as most of the information is shared with intention.
1. Online Sources
Google is the one-stop solution for all queries be they of any nature. It is the most widely used search engine and it is preferred by millennials and others alike. This can be a great way to research various franchises and business opportunities that interest you. It can also provide data about the brands that you are considering for investment.
2. Franchise Expos
Expos are great platforms to explore, learn and communicate. They are great opportunities to exchange knowledge, while also interacting with the domain experts. It also proves to be a good chance to have a chat with the respective representatives of various brands, resulting in first-hand information.
3. Local Franchise owners
The existing owners of brands are a good resource to consider while researching franchises. Since they have been in the trade for a short or long duration, they may guide you with the ground reality which is off the paper. They can suggest the practicality of your ideas and provide suggestions based on experience.
4. Chamber of Commerce
The chamber of commerce is an underrated resource for aspiring franchise owners. They render help to enable the local businesses to prosper and hence they offer a wealth of information regarding what type of businesses already exists in the area, what businesses are coming online, information about the market, and networking opportunities for you to meet other members of the local business community.
Suggestion: There is a variety of information which is available out there, but it is up to you to segregate the relevant information. It is not advisable to rely on one source of information and check with multiple sources. Franchise investment is a good option when you are looking at expansion and an opportunity to own a business.
Once the research gives us an idea of self-analysis, it is advisable to do a comparative analysis between the two firms, to gather inferences, based on which effective deductions can be made. While comparing the two investment opportunities, these points should be borne in mind.
- What is the amount of upfront investment?
- What is the time required to break even?
- What will your role as the owner be?
- What is the amount of time you need to devote?
- How many employees will you require?
- How will you be able to enhance the business?
- How many years is the franchise agreement?
- Will you be able to find an apt location, relatively fast?
- What is the feedback from franchisees about franchisor support?
- Are the businesses affected by the seasons?
Conclusion: In summation, it can be said there is a variety of factors that impact the decision-making process for anyone who is looking for a good investment opportunity. A clear mindset, a dedicated approach, and thorough research can facilitate better decision-making. The above-stated aspects can surely assist an individual looking for a franchise but some principle areas merit attention. It is integral to research the franchise, talk to them about your goals, and expectations, and also thoroughly go through their Franchise Disclosure Document (FDD). Their financial status, revenue model, litigation past, etc play a key factor in how your investment idea could be a boon or a bane.