Franchise opportunities are out there and if you look, you’ll find more than you can count. In order to find out if a business franchise truly is an opportunity of a lifetime, there are a few points that you must evaluate.
Point 1: Market Trend
Most franchise opportunities are based on current market trends. You will see a lot of franchises that promote the current size of the industry along with potential market. But just because it’s a large industry does not automatically guarantee opportunities for success. In cases like this, you should check with industry associations to determine two things. Firstly, the growth stage of the industry you are interested in, and secondly, whether or not that industry has experienced a positive growth over the last few years.
Point 2: Territory Coverage
As you know, if a franchise decides to spread itself too thin, it won’t do well. Over saturation and rapid growth are not necessarily good things. Having a protected territory is important when you sign up for franchise opportunities. This is because being protected means that your competitors will remain outside the franchise company. So before you sign up with franchise businesses, check your contract and find out if you have first refusal rights if or when a franchise becomes available in your local market.
Point 3: Company Support
As you might have guessed, success comes with a strong support network and good franchise opportunities provide a full level of support. This is to ensure higher success rates for your franchise business. Support can come in terms of training, marketing, management and even field support. Signing up for a business franchise that does not offer these things might have you running a franchise without heads or tails. This in turn leads to a low chance of success with your franchise.
Point 4: Exit Strategy
As with all contracts, they will not run indefinitely so it’s important that you determine early on the terms and costs to end your business franchise contract. Before signing up for anything, find out the franchise company’s expectations when it comes to the renewing of the franchise contract in the future.
Point 5: Franchise Business Plan
Franchises are considered great business opportunities simply because they have a higher success rate than regular start up businesses. However this does not mean that a business plan is not required. Having a franchise business plan will be invaluable as it will help you understand your franchise business better as well as the market you are about to tap into.