For some people, putting up their own business and shouldering all the risk is an unappealing idea. You might feel the same way, especially since most startups fail within a year of launch. That’s where franchising comes into the picture. Instead of thinking up your own new business, you can purchase a franchise and put up a business that’s already been well established. However, this isn’t something you should do on a whim. Here are 5 things you should research before getting into bed with a franchise:
The Kind of Leadership They Have
While you are responsible for your own franchise branch, the fact is that the overall success of the company and how it is led will still rely heavily on its leadership. If the business owners have good ideas and are full of experience, then you should be fine. However, people new to running a business tend to have a poor understanding of what a franchisee requires and experiences. This means that their franchise program will likely have a few holes that you’ll have to patch up yourself, which you might not even have the right to fix, depending on your contract. You’re not looking for a fixer-upper – you want something that works out of the box.
Their Technology and Software
Each franchise comes with its own technology and software, and with them, unique procedures. However, just because they’re unique doesn’t mean they’re good. You need to make sure that whatever you’re buying into is up-to-date and won’t quickly become technologically obsolete. For example, you need to check on their website and see if it’s mobile-friendly or if it has e-commerce capabilities. You also need to find out if they have a support system in place to help you should you or your employees find their tech difficult to use.
The Franchisor’s Marketing Strategy
Just because you’re buying into a franchise with an established brand doesn’t mean you don’t have to do any marketing. Without marketing, your branch will probably fail – so you need to make sure that whatever you’re buying into has a marketing support program and strategy that will help you out. For example, you need to find out if they’ll give you a marketing budget or if you’ll have to pay out of pocket for it. You’ll also want to take a glance at their social media team. If they’re doing well, the strategy they’ll hand you is probably competently made.
Their Training Program
Companies are constantly evolving. When new and relevant technology hits the scene, smart and successful companies will adapt to it to their needs. That means constantly evolving to suit these changes, which means constantly learning and training. Not only does a franchisor need to train your initial crop of employees, they should provide follow-up training for any changes to the franchise’s system. You’ll also want to find out if they’ll help you with additional lessons and support should you prove capable and willing to expand your business.
The Support System
As a franchisee, you shouldn’t expect to handle everything alone. You might be responsible for the day-to-day, but a respectable business wouldn’t risk letting someone new potentially damage their brand. If they’re willing to sell to you, they should be willing to support you. This can come in many forms, from helping you find a good location to financing programs for promising business owners who lack capital. The better the support system, the more tempting a franchise should be.
Running a franchise can be a spectacular opportunity for you. You get your own business, without the stress of running a startup, and from there can start building a more financially secure life. However, that’s only possible if you’re picky about the businesses you buy. If there’s any doubt, don’t buy into it.