In this post, I’m going to give you five tips you can use to choose a franchise business opportunity that’s right for you. For maximum success, I strongly suggest you use all five of them.
5 Smart Franchise Tips
1. Check out the demand for the franchisor’s products and services.
Before you get too excited about the products and/or services the franchise concept you’re interested in provides, you need to determine market demand. You have to try and figure out if they’re sustainable. In other words, will you, as a franchisee, be able to offer them for a long time to come?
The quickest way to determine demand is by using your favorite search engine.
Type the name of the product/service into the search bar and see how many results come up. If the number is in the thousands, there may not be enough demand. If it’s in the millions, that could be a good sign.
But to really find out, you need to get data from the front lines. You need to talk with the franchisees. They’re the ones who are actually selling the same things you’d be selling. Ask them if there is good demand. Believe me, they’ll tell you.
2. Make sure you analyze the competition.
Once you determine market demand, you need to find out how many other businesses are offering the same, or similar, products/services.
Once again, it would be smart to contact existing franchisees to ask them about the competition. Questions like:
- How much competition is there?
- Are there any new players in your market?
- How good (or bad) is the competition?
3. Assess your abilities.
It’s important for you to assess your abilities.
You need to do this in a general way, but also in a specific way. You need to determine if your abilities are a good match for what you’d be doing as the franchisee.
For example, if you consider yourself to be a highly-organized, detailed, and operationally-minded person, you need to find out of the franchise concept you’re investigating needs those types of skills for maximum success. Some franchises do, while some don’t.
4. Find out what policies the franchise organization has.
It’s entirely possible that the franchise opportunity you’re most interested in has a business policy or two you disagree with.
What if, for instance, their policy concerning product refunds is counter to what you’re used to seeing in the marketplace? Like if their money-back guarantee is a 100% no-questions-asked one, which can impact your revenue numbers in theory.
On the flipside, you may find (by talking to franchisees) that customers like it so much, they consistently tell all their friends how good it is, and it actually increases business.
The bottom line: find out as much as you can about how the franchise does business. That way there will be few to no surprises.
5. Examine their technology.
These days, businesses that utilize technology in the smartest way possible tend to win. That’s why you need to take a good look at what the franchisor is using.
One way to do that is with a visit to franchise headquarters. Specifically, by attending what’s called a 'Discovery Day' That’s when you’re formally invited to travel to headquarters, so both parties can get to know each other.
I always recommend attending a Discovery Day, but only if you're very serious about becoming a franchisee of the franchisor that invited you. In other words, don’t attend one if you’re just curious. Attend one if you’re almost ready to say “yes.”
If you do go to one, technology will be discussed. It’s your opportunity to see what technology they use, and to ask questions of the employees at headquarters who are in charge of it.
In franchising, just like in any business, the technology used varies. Make sure the franchisor you’re interested in partnering with is using good technology and is utilizing it correctly, as it will help your franchise business run smoothly and efficiently.
The Franchise King®, Joel Libava, is a top franchise expert. He’s written over 2,000 different articles on franchise ownership and personally consults with people who are looking to buy a profitable franchise. Go here to find out how The Franchise King® can help you become your own boss.