Formed in
1999, we are a group of consultants ready to
assist you in realizing your franchising dreams! Like any other
investment, purchasing a franchise is a risk.
When selecting a franchise, carefully consider a
number of factors, such as the demand for the
products or services, likely competition, the
franchisor's background, and the level of
support you will receive.
Demand
Is there a demand for the franchisor's products
or services in your community? Is the demand
seasonal? For example, lawn and garden care or
swimming pool maintenance may be profitable only
in the spring or summer. Is there likely to be a
continuing demand for the products or services
in the future? Is the demand likely to be
temporary, such as selling a fad food item? Does
the product or service generate repeat business?
Competition
What is the level of competition, nationally and
in your community? How many franchised and
company-owned outlets does the franchisor have
in your area? How many competing companies sell
the same or similar products or services? Are
these competing companies well established, with
wide name recognition in your community? Do they
offer the same goods and services at the same or
lower price?
Your Ability to Operate the Business
Sometimes, franchise systems fail. Will you be
able to operate your outlet even if the
franchisor goes out of business? Will you need
the franchisor's ongoing training, advertising,
or other assistance to succeed? Will you have
access to the same or other suppliers? Could you
conduct the business alone if you must lay off
personnel to cut costs?
Name Recognition
A primary reason for purchasing a franchise is
the right to associate with the company's name.
The more widely recognized the name, the more
likely it will draw customers who know its
products or services. Therefore, before
purchasing a franchise, consider:
- The company's name and how widely recognized
it is. -- If it has a registered trademark.
- How long the franchisor has been in operation.
- If the company has a reputation for quality
products or services.
- If consumers have filed complaints against the
franchise with the Better Business Bureau or a
local consumer protection agency.
Training and Support Services
Another reason for purchasing a franchise is to
obtain support from the franchisor. What
training and ongoing support does the franchisor
provide? How does their training compare with
the training for typical workers in the
industry? Could you compete with others who have
more formal training? What backgrounds do the
current franchise owners have? Do they have
prior technical backgrounds or special training
that helps them succeed? Do you have a similar
background?
Franchisor's Experience
Many franchisors operate well-established
companies with years of experience both in
selling goods or services and in managing a
franchise system. Some franchisors started by
operating their own business. There is no
guarantee, however, that a successful
entrepreneur can successfully manage a franchise
system.
Carefully consider how long the franchisor has
managed a franchise system. Do you feel
comfortable with the franchisor's expertise? If
franchisors have little experience in managing a
chain of franchises, their promises of guidance,
training, and other support may be unreliable.
Growth
A growing franchise system increases the
franchisor's name recognition and may enable you
to attract customers. Growth alone does not
ensure successful franchisees; a company that
grows too quickly may not be able to support its
franchisees with all the promised support
services. Make sure the franchisor has
sufficient financial assets and staff to support
the franchisees. |
