Many people always ask what is the best franchise business to invest in. Often the basis would be on the price; something affordable and within the range of one’s pocket. There are also those who base their decision on what their neighbor invested in.
Investing in a franchise business entails giving time to understand and weigh different circumstances. Impulsive decisions are definitely a no-no.
Here are indicators of a good franchise. Please note though you still need to do due diligence.
A Successful Model
Franchising is a scheme used by many entrepreneurs to help expand their business. A franchise business expansion means there is already an existing model to serve as basis. Establishing the business is just one step. The other step is to ensure the products/services actually sell. The model also calls for identified customers, location parameters as well as a healthy financial bottom line.
Established Systems and Procedures
The business model becomes the basis for identifying and establishing systems and procedures. The Franchisor ensures procedures are carefully followed to ensure a smooth flow of the business. In successful franchises, these are compiled into manuals. Revisions are done if it will help achieve efficiency.
Clear Vision and Direction
Opening a business for franchise is like opening one’s gate to the public. Interested parties begin pour in and inquire on the amount to invest as well as other details. Beforehand the Franchisor must have clear directions on how he intends to grow his business. The size and manner on the conduct of business is specified. There are Franchisors who simply want to open few branches and with specific locations in mind.
Criteria for Choosing Franchisees
For many years, I have always likened getting a franchise with entering into marriage. The business may be successful. However the key element is making sure there is a synergistic relationship between the business owner and franchisee. I have seen Franchisors that because of sheer impatience disregarded the importance of having a criteria for choosing Franchisees. Everything was all about money. These Franchisors never last a decade.
Support Services and Improvements
When a business grows, the back office support grows in tandem. The entrepreneur has laid down everything from product preparation, staff training and marketing. Seeing inconsistency in the branches or a lag in customer service are signs of problems with the head office. In successful franchise businesses, there are compliance officers who leave little room for error in the system.
Communications with Franchisees and organization.
I have seen franchisors that are always available to everybody. In fact, they will even visit franchisees, talk to employees and even those behind the scenes. I was surprised when I walked into one of the food chain and saw the franchisor attending to customers as a cashier. When he saw me, I was told he wanted to see how effective the newly installed POS (Point of Sale) systems his company purchased. Oh by the way, he was not just there for a minute. Aside from wearing the company uniform, he worked one shift.
The next time, one would like to invest in a franchise business, check out the timeless signs.