How to Buy A Franchise
Buying A Franchise
Buying a franchise comes with a lot of amazing opportunities. Amongst other things, you can key into an existing brand, without having to do so from scratch yourself. Trust is one of the most important factors that influence customer buying decisions. With franchises, you do not need to worry about that as the franchise has already built that.
Nevertheless, you still have to be careful in going about the process of buying a franchise. There are some factors you have to look into.
The Track Record of the Franchisor
This is by far the most important factor to consider when deciding which franchise business to purchase. You have to know how well the franchise has performed, the quality of their products and services.
More importantly, you have to assess their brand quality, image and perception. You must research how clients view the company before deciding to key into such a company.
All of these might seem like work, but they are quite important. This is because you are not going about starting to build a brand or business from scratch but to key into the franchisor’s brand.
However, the internet has made things quite easier; you can easily research their social media brand awareness. You can meet real customers via social media and get to know from them first-hand. With this, you would have done due diligence on the business, and be well informed on undertaking business strategy.
The next thing to look into is the business model of the said franchise. Is it one that you are quite comfortable with and that you will want to key into?
For instance, if it is a restaurant chain, you want to know if it also allows for home delivery. Some franchises might run business models that may make it difficult for franchisees to become profitable.
Actual Franchise Agreement
This is quite another very important factor to consider. Before you start franchising under a business, you will have to agree with the business. This most times involves both parties signing a franchise contract. This contract usually has terms listed in it.
Before you sign that contract, you must study it to know if you are comfortable with all the terms contained therein. If you are not comfortable with terms, you can negotiate them for you to get better deals. For instance, the business model the franchise runs may not be one that appeals to your business sense. You can negotiate that you be allowed to modify this a bit. For example, you might want to introduce e-commerce to the business model, if it is purely brick-and-mortar.
However, some franchises have rigid terms and do not allow for negotiable contracts. We strongly advise that you avoid these, no matter the business case that they may present. Although there are many other factors to be considered, it is believed that the above are the most important.