A franchise provides almost everything an entrepreneur needs to succeed in business before starting. In return for a fee, the franchisor (the company issuing franchise license) would give the entrepreneur a trusted brand name, proven business model and systems, and ongoing guidance.
Undoubtedly, buying a franchise can be a viable alternative to starting your own business from scratch. However, finding the best franchise for you can be challenging.
If the franchise idea appeals to you, here are ways you can know the franchise that is for you.
The first step to finding a suitable franchise is knowing and being clear about your goals and vision. For example, why do you want to start a business, and what do you want to achieve? Is it just to make money? Do you want to make more money working from home, or are you looking to own a chain of businesses?
“By figuring out your actual goals, you will be able to determine what franchise is a good fit to help you meet those goals,” said Dan Martin, president and CEO of franchise consulting firm IFX.
It would be best also to determine the industry you are interested in doing business. Franchises may be popular with fast food restaurant businesses, but they aren’t limited to that. The business structure operates in other industries.
After answering the questions, make a list of all your options. Then start your research. You must begin researching the different options you’ve selected. You can attend various franchise events, fairs, and exhibitions to have first-hand information about your choices.
If this is not feasible, you can conduct online research of the company you intend to seek a franchise from. The International Franchise Association is an excellent place to start. The platform provides vital information about the franchise procedure in every African country. This will guide your business agreement with the franchisor, such as the franchise fee, the franchisor’s litigation history, and so on.
Also, the Franchise Association of Southern Africa is a trade association that represents franchisors, franchisees, and professional organisations that support the franchise market. Its goal is to improve and protect the business environment in the country for ethical franchising. You cannot be wrong when you internalise all you have researched.
It would be best to consider your financial strength. How much are you willing to spend on the business? This is why you need to consider if you are in it long-term or short-term. The structure you want to adopt will determine the capital to be invested. This is also because most franchises require you to have specific money before starting your business.
When you determine your budget, be practical. Note that not all franchises take off within a short period, some take time to be lucrative, but it’s undoubtedly an advantage compared to starting from scratch. So, ensure you budget enough to last until the business becomes profitable.
If you want to be in it for the long term, you can pitch your idea to investors or venture capitalists or talk with a lender specialist in franchising.
One on one discussion
Through your discussion with the franchisor, you will either solidify your decision for the franchise or rethink it. If the meeting goes well, it is suitable for you, and if otherwise, it is a terrible idea.
This is one way of knowing which franchise is best for you because two cannot work together unless they trust each other. The relationship between the franchisor and the franchisee is built on mutual respect.
The franchisee should have complete faith that the franchisor is looking out for their best interests. It is not always that things will align in any relationship. Still, as a franchisee, you should have the impression that the franchisor has the best intentions and continually develops the brand.
However, from the discussion, note the red flags. If a franchisor refuses to connect you with its franchise owners for more insights, it’s time to look for another option.
Continuation and execution of the franchise agreement
If the continuation of the business will be smooth sailing for you, you are in the right franchise. So, ensure the franchise agreement and supporting documentation are signed and executed. The most essential is to provide the resources and capital. Also, ensure you make a copy of the completed paperwork and keep it in a safe place for future reference.
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