Joining a franchise is just like riding piggyback on a company that has attained success by adopting a particular marketing formula.
The biggest advantage in franchising is that the brand name has already been established – and all you need to do is to just ensure that the product reaches out to more customers.
Here are some points to ponder if you are thinking of starting a new franchise location.
Know the Company and the Need for Its Products in your Neighborhood
You will need to survey your neighborhood to find out whether the product that you are planning to sell will be in demand.
There is no point in starting a franchise with a high value product in a low-income neighborhood or vice-versa.
Location – The Outlet Where You Plan To Operate
You will also need a suitable outlet according to the type of business that you plan to start as a franchise. So, if you are planning to start a food product franchise such as pizzas or burgers, then you will need an outlet where you can install a kitchen. You’ll also need additional place for parking and take-outs.
Similarly, if you are starting a franchise for sports shoes, then you will need your outlet to be based in the shopping district of your neighborhood, preferably in a prominent place.
Review the Company’s Franchise Policy
You should thoroughly review the parent company’s franchise policy before you decide to join them. Hire an expert franchise attorney who can explain the pros and cons of the franchise deal. You might have to pay franchise and royalty fees for using the parent company’s name and logo.
There will also be many other fees involved as well, for training of staff, getting the interior and exterior of the outlet done according to the parent company’s theme, and for the equipment required to run the business.
The parent company will help you – and might even share the expenses with you, depending on the agreement.
Have Additional Funds in Reserve for the First Year
You might not earn much during the first year because of the high level of investment required, and also due to franchise fees and other related expenses. So you should have some funds in reserve, just in case you run out of cash.
Sometimes, a new franchise takes additional time to get up and running reliably, and you will need to be prepared to pump in extra money to stay afloat in the first year – and maybe even in the second.
Think Long Term
If you are planning to open a franchise, you should think about the benefits in the long run. You might have to struggle in the short-term, but if your planning and execution is good, then you should realize excellent returns in the long run. Hang in there and do not lose hope if it takes a little more time to get going.
So check out all the facts and figures before deciding on which franchise is suitable for you – and you could piggyback your way to success.