What is a franchise? How to choose a right franchise
Let’s start from the franchise, simply we can say that franchise is one type of business which is operated and owned by a person or group of persons(typically known as franchisees) but which is branded by a larger, commonly national or multinational companies(known as the franchiser). You can see lots of companies and stores in your day to day life. For example, popular food brand like KFC, Dominos, McDonald’s, fashion stores like Tommy Hilfiger, Peter England, Louis Philippe etc. franchising booming day by day with thousands of people searching for franchise opportunities.If you want to be your own boss, you should carefully select the best franchise from your shortlist. Here I am going to discuss some amazing tips for choosing the right franchise
Tips for choosing the right franchise
When you are planning to buy a franchise, the primary step is to evaluate yourself. which means ask yourself, what type of franchise you really want and sort out things like- where you want to start your business,what kind of thing you good at, how many hours you can work, how much money you need, how much much you can afford etc. once you evaluate and identify all these things you can easily choose a suitable franchise for you.
We all know that money plays the most important and crucial role in business.so before you are going to start your venture you need to do a proper study on the capital market especially the market which you want to start your franchise. Where do we get fund? There are several options you have, such as franchisor-franchisee options, government incentives, advance cash option, business loans, investors and venture capitalists etc.
Prepare a category wise list of different franchisers based on the reviews and rating, it should help you to create an overall idea about the current marketing strategies.when you are going to evaluate the market, then concentrate more on different categories of industries, not on an individual company. When you find a good industry from the list, then you can move on to individual companies from that selected category.for example, if you selected food industry, then you have different franchises like McDonald’s, KFC, Quiznos, pizza hut, Starbucks coffee etc.
4.Contact franchisers for gathering information
After preparing a short list of a few companies which are suitable for your requirements, contact the selected companies and request for the preliminary details. At the time when you visit the company, they give you details in the form of brochures, website, videos or other materials etc. study and review all the details you have gathered from different companies and select the best one from that. Before confirming the company, you should think about why you to choose that company? What are the good signs behind that franchise? You can analyze it based on the following factors:
- High-quality support system
- Good Customer service
- Good people at corporate
- Reviews of existing franchisees etc.
5.Evaluate the franchisor disclosure document(FDD) very well.
When you select your franchisor and complete the qualification process, you will get an FDD(franchisor disclosure document) from the franchisor. The FDD contains the detailed information about the franchise, legal information, history of the executives, names and contact information for the ongoing franchisees, a copy of franchise contract etc. before you are moving to the next step, you should carefully study the FDD very well. Especially in the part of the litigation, payment options, current and past franchisees.
6.Visit the franchisor
Once you’ve evaluated the franchisor disclosure document(FDD), ensure that you don’t need any further clarifications or inquiries. This is the important and final stage of buying a franchise, in this section you are going to visit franchisor headquarters and have an official and full conversation about terms and conditions like marketing, support, backup etc. if you are happy and convinced with all these conditions, you can confirm your decision and move forward.
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