Falling in love with a brand, be it for awesome customer experiences or any other reason, is not enough to franchise it. Becoming a franchisee is a long-term commitment. It is very crucial to do your own research, investigate, and assess your options. Afterwards, you can decide whether a franchise is the right fit for you or not. Here are 4 Tips For Researching Franchise Opportunities, courtesy of WinmarkFranchises.com
Nothing beats the words of wisdom from someone who has been there done that! Network with other franchisees, ask to meet them, and make sure to listen to them. Some of them would love to share their experience. Others would shun you, but that is on them, not you. A franchisee’s website would be a good start, but visiting their location will tell you even more.
Look for people who are in similar situation like you. Those who live same as you and share your goals and interests. Their input will help you to better-understand life as a franchisee. It will give you a very good idea about the franchisee life. Most importantly, it will help you to know if you have what this franchise needs to succeed.
According to the Franconnect State of Franchising 2021 report, 79% of US franchisors plan to expand this year, with 11% opening more than 25 units. They also predict record-breaking sales in 2021 – that is, if COVID-19 remains contained.
While meeting up with current franchisees will give you a very good idea, but it is not the full picture. As a franchisee, you need to understand whom you are competing with. You need to study the competition to know their weak points and strengths. Visit their locations and try to talk to their customers. Get a feeling of the current trends in the market, and put down a plan to be ahead of the competition.
No, if you build it, there is NO guarantee they will come. You need to consider whether your community is ready for the franchise. Choosing the right location is a matter of life or death for any business. In fact, it is the most important decision you will make as a franchisee. Is there a need for your store in the local community where you plan to open? Research the demographics, the commercial landscape, and the demand in your area.
According to a survey by Franchise Business Review, the average pre-tax annual income of franchise owners in the US is around $80,000. Only 7% of franchise owners earn over $250,000 per year with 51% of them earning less than $50,000.
The FDD provides information about the franchisor, the franchise system, the business model, and many other aspects of the franchise. A standard FDD should cover 23 items that you need to understand thoroughly before you sign the franchise agreement. The FDD should also answer all remaining questions you may have about the franchise.
Whether you are a first-timer or an experienced franchisee, doing your research and asking the right questions before investing in a franchise is definitely the key to your success as a franchisee.
Running a franchise is a serious decision that should be made with good care. Learn as much as you can about the franchise, its products, and the location where you are looking to set up shop.
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