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Things to Consider Before Taking a Franchise

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TASK: 

Assume you want to become franchisee of a company and what are the 6 factors you will consider to make your choice (discuss 6 factors).

A franchisee is a small business owner who operates a franchise. The franchisee uses the brands, logo, system and way of work of the franchiser and makes a profit about it. Despite the numerous advantages of becoming a franchisee, many factors must be considered before choosing the franchise you want to collaborate with. Some of these factors will be discussed in the body of this work.

Things to Consider Before Taking a Franchise

Before becoming a franchisee, the six main factors that must be considered before the choice are: 

  • The Earning Potential

It’s suitable to examine the profitability of a franchise before choosing it. You have to know the cumulative revenue of the franchise over many years, how it manages the financial department and how the business can be profitable in your location. 

  • The Opinions and Experience of Other Franchisees

It is a good idea to take into account the opinions and experience of other franchisees. Through interviews, one can inform themselves of the advantages, the way of working of the franchisors and the investment needed to succeed in our business.

  • The Brand Image 

The brand image is very important when you choose your franchise. It increases the visibility in your area, attracts customers and increases growth. Therefore, the company’s experience and popularity have a great advantage when you choose.

  • The Franchise Must be Able to Provide Great Training 

Receiving coaching from the franchisor is a great opportunity to grow your earnings. The franchisor has to offer a well-thought-out, structured and proven coaching program. Sometimes great franchisors understand that their success depends on their many franchisees. 

  • Know the True Cost of Being a Franchisee

The important thing before choosing your franchise is the running cost and the total investment to get your franchise up and running. This should include the costs of the purchase and the amount that you will pay per date to your franchisors.

  • Receive the Exclusivity of an Area 

One of the big factors to success is to acquire territory. It will be great if your franchise gives you a specific area to work but not put 2 franchisees in the same area which will lead to competition in the same area.

To conclude, many factors must be taken into account before the choice as it will determine whether it will succeed or fail. Free choice for you to conduct a good investigation before making your decision.

References

  • wikipedia.org. 2020. Limited Liability Company. [online] Available at: <https://en.wikipedia.org/wiki/Limited_liability_company#Advantages> [Accessed 22 August 2020].
  • Stowe, S., 2015. Top 5 Factors To Consider When Looking To Franchise Your Business – Inside Franchise Business. [online] Inside Franchise Business. Available at: <https://www.franchisebusiness.com.au/top-5-factors-to-consider-when-looking-to-franchis/> [Accessed 25 August 2020].
  • Tredgold, G., 2020. 7 Things You Need To Know Before Becoming A Franchise Owner. [online] Entrepreneur. Available at: <https://www.entrepreneur.com/article/305010> [Accessed 22 August 2020].
  • What Franchise. 2020. What To Consider Before Buying A Franchise | What Franchise. [online] Available at: <https://www.what-franchise.com/business-advice/running-a-franchise/what-to-consider-before-buying-a-franchise> [Accessed 23 August 2020].

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