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Franchising interest is growing as people use this year’s uncertain time to reconsider how their life might look going forward. For many, changes from the pandemic mean less security or no income at all. A stable franchise, on the other hand, can offer both income and greater security if you look for market (and virus) resilience.
Consider these three cornerstones of a stable franchise to help create your new and more certain future.
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1. Search for Repeating, Non-seasonal Revenue.
Many franchises focus on specific seasons: extermination for summer bugs, winter snow removal or autumn holiday decorating. These are suitable for many people, but if you want something consistent, look for franchises that offer services year-round for repeat customers.
For example, rather than a one-time sale of office design, focus on services that attract residual income or provide ongoing assistance in the form of weekly or monthly business. Animal grooming, home maintenance, or shipping contracts for businesses all offer ongoing, non-seasonal customers.
2. Expect Strong Finances and Make the Franchisor Prove It.
Of course, a strong financial position matters, both for you and your potential franchisor.
Success is easier to achieve when there is enough to invest. No one would ever recommend otherwise, but how do you research this? Ask potential franchisors to disclose their financial documents. You might not understand what the numbers show, so enlist the assistance of a trusted financial professional.
And while you’re researching, ask about financial incentives that franchisors offer. Those with stable finances might offer low franchise fees or provide financial incentives when you hit certain growth milestones. Look for clues that the franchisor is financially committed and able to help you succeed.
3. Stick with the Tried and True.
There are excellent business entrepreneurs who are franchising their newer ideas. Getting in at the beginning could be very lucrative, too. But if you are looking to reduce the uncertainly caused by a pandemic, then choose a franchisor with a long-term, proven track record.
Dig into regional data that match your own plans. If you are the first franchise location in a metropolitan area, for example, compare yourself to other first-timers in metro areas. A year of pandemonium is not the time to be blazing new trails when you are looking for stability. If the franchise you choose is a known entity, you will benefit from market recognition and then share in the success.
This year’s wild story of pandemics and uncertainty can have a happy ending for you as a new franchisee. While the pandemic will only fill a page or two in high school history books, you now could rewrite your future with a well-planned franchise search. A stable future lies ahead if you investigate these key components of a stable and profitable franchise model.
Anne Daniells is a co-owner of Enterprising Solutions, a professional services firm specializing in corporate communication and financial improvement for businesses where she shares decades of corporate and entrepreneurial experience—including franchise ownership—in her writings on business culture. She has authored hundreds of articles for publications including AllBusiness.com, TweakYourBiz.com, and MSN.com. Reach out via her website for more on where corporate culture, communication, and human architecture collide.