The franchisor in a franchise business provides a developed way of doing business, ongoing guidance, systems and also assists in return for periodic payment of fees and/or purchases along with an SOP which plays a key role in achieving targets.
A franchise can be a viable alternative to establishing your own business.
Listed below are some advantages and disadvantages of buying a franchise.
Advantages of buying a franchise
• Franchises offers benefits of a big business network to independent small business owners.
• A proper hand held training is provided by the franchisor to the business.
• Increases the chances of success as it is a tried and tested business model.
• It cost of buying a franchisee will be less than developing our own business of niche as it requires research which take time.
• Franchisor often offers a well-established brand reputation and name in the market which brings confidence.
• Marketing on a larger scale is usually carried by the franchisor.
Choosing the right franchise
Choosing the right franchise is the stepping stone of success in franchisee business option. It is important to find a business model which reflects your interest, skills, experience, motivation and futuristic approach.
Following questions to be asked before buying a particular franchisee
• Do I possess the ability and commitment it requires?
• What are my strengths and weaknesses?
• Am I willing to work within the limits of a franchise?
• Am I prepared to strictly follow the SOP of the franchisor
• Am I prepared to work long hours and make sacrifices?
Assessing franchise opportunities
Legal, financial and business implications should be taken under consideration before investing into a franchise.
Answering the below mentioned questions with your accountants team, lawyer or business adviser will help you take a concrete decision
• Reputation and age of franchise model.
• Ownership and track record.
• How robust and successful is the franchise system?
• A brief description of support provided by the franchisor in terms of training, purchasing, choosing a location, marketing and advertising?
The franchise product or service
• Product / Service market niche.
• Patient, Registered Designs, Trademark, Copyright.
• Financial Projections.