How to Choose A Profitable Franchise
For those running a small business or getting into the world of entrepreneurship, franchising is a significant detail to consider. It is a great way to get into that first step that you have always been avoiding. However, not all franchises are equal; therefore, you need to realize that it is the CEO of a franchise system that determines if the impact they make will be successful or unsuccessful.
Therefore, as an owner of a Small Medium Enterprise (SME), you need to do enough research to get the right franchise manager to help your business grow. Here is how to choose the right franchise and grow your small business to make profit.
Employee turned businessman
John Falvey was a specialist broker working for a Wall Street firm known as Goldman Sachs. When he decided to change his career, he met a colleague who was doing well as a franchise owner for a pet grooming service. Since joining the franchise, he mentions that there is good money in the franchise business.
Despite having to change from a suit and tie type of job and working with a different uniform, he is comfortable financially. He has to clean heating and air conditioning systems in New York. Nonetheless, he does not regret deciding to leave his broker position. As such, how do you choose a profitable franchise that will take you from a small business person to mega profit type of business?
Interview the franchisor
You should not take lightly the fact that you are getting into a partnership with a franchisor. You are placing your capital and individual effort towards your business. As such, you need to get enough information on the agreement you are about to sign. Read the fine print on the Franchise or FDD agreement to understand what the franchisor is prepared to offer for your business ideas.
Look for qualities such as integrity, vision, and an authentic concern on the part of the franchisor about the investment you are ready to make. Consider the brand and find out how interested the franchisor is on the business ideas you are offering. As a business person, this will not be so hard to figure out.
In addition, talk to franchisees who are in the business you need to get into. They will provide you with insights as to how the business operates based on their experience with the franchise. Get referral scripts to help make your decision easier. Once you get this information, you will know who you are working with professionally as well as personally in the franchise of your choice.
Research on the franchise you want to be a part of
You have to be brutally honest with yourself. Take a step back from your present station in life and find out what you want to be successful. Consider some questions such as;
- Goals to achieve from the franchise: do you want to take it as a hobby while you continue with a full-time job? If you want to leave your full-time job, will this be your single source of income? Will you need to get into multiple franchises? Once you consider the answer to these queries, you need to select one reason why you need to get into a franchise and safeguard your financial future.
- The investment you wish to make: ensure that you have a budget showing the amount of capital you want to invest in the franchise. Work within your budget, and you will get an idea of the type of franchise that you can manage to get into and make a profit.
Be sure you have enough money to live on while the investment bears fruit and profit. Do not consider loans when looking to get into a franchise. The amount you get may not be enough if you rely on bank loans. Franchise investments can be as low as 10,000 dollars. If you want to go it alone, $200,000 may not provide a suitable location for an SME.
- Exit strategy: Do not neglect this issue. Have a timeline within which you need to stay in the franchise. If you need a new interest or another franchise, be realistic. Relay this information to the franchisor to keep them informed on when you wish to exit the franchise.
Joining a franchise will make it easier for your business and save you the amount of capital you require to go it alone. Therefore, using the information above, you will get the right franchisor who will make your business grow and generate profits that would be impossible if you choose to work alone.
