As with any business, it takes two to make a successful franchise relationship. Whilst it is the franchisor’s responsibility to provide a sound business system, technical and financial know-how, it is also the franchisees responsibility to ensure that their investment is well made by assessing for themselves the suitability and promise of the business.
Firstly, before considering the purchase of a franchise, it is important to take stock of the most important element of the equation – YOU.
It is important to ask yourself:
- Do I want to run my own business?
- What are my skill sets?
- What is the area of my interest?
- What are my strengths and weaknesses?
- How much of my time am I willing to dedicate to building this franchise business?
Secondly, explore different franchise opportunities and make sure the franchise in question fits as many of your personal and financial goals as possible. Do not simply find the franchise you like and fall in love with the idea. Look out for some of the practical implications.
Some franchises may require a larger investment but offer more franchise training and franchisor support along the way. Some franchises may offer you very attractive terms but may also translate to lower levels of franchisor support. It is important to assess the various elements of the franchise opportunities before committing to one franchise.
Thirdly, assuming you do find a franchise you do like, what is your next step?
Contact the franchisor and begin finding out more in-depth details of the business.
- Are their materials professional and up to date?
- Are you treated professionally?
- Are your questions well answered and to your satisfaction?
- What is the franchise fee and monthly royalty?
- Is there a franchise training fee or is it all inclusive?
- What support does the franchisor offer?
- Do they provide a strong franchise training program?
- Do they offer strong technical support?
- What is their supplier program?
- Do they help you secure locations?
Finally, after you have assessed all information relevant to your decision, narrow down your options and decide on the franchise most suitable for you. At this point, the franchisor may ask you to sign a letter of intent to confirm your interest or they may offer you their franchise contract. It is important you study the agreement carefully to understand your obligations and also ensure that your franchisors’ obligations are clearly defined.