Acknowledging, franchising to be a business model involving lesser risk as compared to starting an independent business venture, a lot of business aspirants are opting for franchise business. Zeroing down on a franchise opportunity is also not an easy tas
Investing into a franchise business makes setting the business easier and less risky. The franchisor has already done a lot of ground work for his franchisees: they have created strong business plan, have built strong brand recognition, and have also made out detailed plans for national level marketing and advertising as well. However, one should never jump into entrepreneurship, even as a franchisee until all aspects of the concept and its market are absolutely clear. The article highlights the various researches and factors that an aspirant needs to keep in mind before investing his hard-earned money in any franchise opportunity.
Initial study by an aspirant
It is everyone’s dream to have lots of money, fame and power but only a few works to achieve this dream! Some take the entrepreneurial way for turning this dream to reality. Nevertheless entrepreneurs also have to plan and execute each step carefully to reach their goal. Let us have a look at the various things to be remembered while taking any franchise:
Suitable franchise opportunity: The first step is selecting a franchise opportunity that can work well with their interest as well as their passion for business. A person fond of eating and cooking delicious food would be more suitable for a food franchise rather than taking education or retail franchise. Therefore, as an aspirant always take a franchise that interests you a lot.
Importance of brand equity: After selecting the concept it is important to select one or two brands of the concept and get information about them. As shared by Shahnaz Husain, MD and Chairperson, Shahnaz Husain Group of companies: “The aspiring franchisee should keep the position of the brand in mind. If you can take up the franchise of an established brand name, you derive the benefits of brand recognition, brand loyalty and the goodwill that the brand has built up. It is also essential to find out the business model.”
Know the concept inside–out: It is essential to understand the concept of a franchise business selected by you. Understanding the concept is essential for gauging its perfect location in market, its target customers and their preferences. Moreover, aspirants should know whether the concept relies on impulse buying of customers or it is a planned buying.
Research about franchisor: The truth is that each franchisor has specific set of rules and behavioral pattern that he has included in the business. All franchisees get a Franchise Disclosure Document, but understanding the document may take very long. Therefore, it is advisable for aspirants to find out about the franchisor’s way of handling his franchise network prior to joining the network. Knowing about the franchisor in advance helps in building a strong relationship with him.
Trust the franchisor: Franchisor being an expertise in the industry the aspirant must listen to his advice. Good franchisors have already done a lot of the market research to make the business successful. It is in their best interest to keep track of demographics, and this would be shared with all franchisees. They also have the most important ingredient for success, EXPERIENCE that is totally lacking in you as an aspirant. Therefore, it is for your benefit that you trust the franchisor to an extent.
An eye for the future: Smart entrepreneurs always keep an eye on future growth of the concept they have taken. Before buying any franchise, study the future potential and growth of the product or service in your locality. As, Husain informs: “It is essential to know about the market and its potential. In terms of the beauty market, it is essential to find out the percentage of growth in the beauty products, as well as the beauty salon business. For example, many salons are converting into day spas and offering spa treatments. Therefore, the market research will reveal the trends.
To conclude it can be said that taking and running a franchise is easy if you have the finance and other requisites but to make it successful is a difficult task. Therefore, it is always recommended to select a franchise after careful deliberation and research.