Five Keys to Selecting the Right Franchise Opportunity
Are you among those ambitious entrepreneurswho want to open a franchise? Curious about how to begin your foray into theworld of franchising? You want to select a reputable company with greatprospects for the future — but with so many franchise organizations on themarket, how do you identify the one that’s right for you?
While the franchise model provides a lucrativefuture for so many entrepreneurs across a wide swath of industries, you shouldconsider opportunities that fit your own interests, capabilities, and goals. In addition, you should evaluate prospectivefranchises in the following four areas.
Analyze Market Opportunity
Take a strong look at the product or serviceyou’re considering investing in. What is the market outlook for that particularproduct or service? Every business category — food, fitness, retail, homeservices — comes with its own opportunities and liabilities that are subject tochange based on the economy and the nature of customer demand. Sometimes youcan find options that help insultate you from risk. For example, an entiregeneration of baby boomers is about to enter its twilight years, so manybusiness-minded people are thinking, what does this mean for senior care? Theoutlook for this particular industry would seem to be pretty strong for thenext thirty years.
On the other hand, some franchises havefamously closed their doors or were supplanted based on customer preferences.In the 1990s, some physical media mainstays – Borders Books and Blockbuster –failed to keep pace with changing technology trends. Now those reigningbehemoths have sunk into extinction. More recently, fitness companies like NewYork City’s Soul Cycle imitator, FlyWheel, were chasing a trend that has peakedand receded in conjunction with the pandemic.
Observe Financial Performance
You’ll want to analyze how prospectivefranchisers have been performing over the course of their life and whether theyare poised to grow within the current climate. Ask yourself, how much risk areyou willing to take on a potential venture? Upon careful assessment, you maywant to locate an investment model with a lower upfront cost and/or higherpotential for revenue. Alternatively, you might lean more toward a franchiseopportunity you know will generate a certain amount of revenue right out thegate. Or, perhaps one that offers financing When you’ve satisfactorily answeredthese questions, if you’re still interested in a particular brand, reconfirmhow well it aligns with your interests and goals.
Look at Company Leadership
Because you will be teaming with an existingbrand with its own established history, you’ll want to familiarize yourselfwith their complete brand identity: how they express their values and mission,and, more importantly, how consumers perceive those values and mission. Considerthe company’s history, longevity and stability. You’d be amazed at how, oncloser inspection, many brands will automatically weed themselves out ofconsideration based on weak fundamentals.
Next, see who is at the top of the franchise’scorporate leadership and who is managing the company’s image and operations atthe franchisor level. This is the management team who will train you and likelybe your go-to as you set up shop and get acclimated to your role as afranchisee. You want to be sure your personalities cohere, and you feel akinship with the company culture.
Beyond evaluating thecompany leadership, you will also want to conduct your own “due diligence” onthe franchise you’re considering. Besure to review the Finance Disclosure Document (FDD), which is one of the mostimportant documents you will need to understand in the franchisingprocess. The FDD is full of all sorts ofinsider information on the franchise you’re considering for your businessinvestment. It will reveal all you need to know about who the franchisor is,and the business you’ll be operating. It will also give you great insight intohow the franchise is run.
Examine What Sets the Franchise Apart
From franchise web design and franchiseadvertising, you should be able to identify what sets apart a particularfranchise within an industry. OpenWorks, for example, has made a name foritself as a leading facility manager for businesses in many kinds of buildingsacross many different industries. OpenWorks franchisers know they are appealingto a corporate or professional clientele who associate OpenWorks with astandard of care and expertise that extends across many locations andoperations — one major element that sets us apart.
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