Are you looking for some honest neutral franchise information or has a particular franchise opportunity caught your eye?
Are you considering becoming a franchise business owner, a franchisee? Are you looking for some way to get into business for yourself as a means to a better income and lifestyle? But are you getting good franchise information?
I applaud you for looking into a Franchise opportunity for yourself, this is the only way to get ahead of the devaluation of the job market. You know what I mean, with companies hurting, wages and benefits are going to suffer for some time. Yes, the only way for you to get ahead of the income curve is to become self employed and a franchise opportunity is one way. The question is, do you know what you are getting into, do you have good franchise information? What do you actually know about the franchise opportunity you are looking at?
Before you invest a large sum of money into a franchise opportunity and commit the next few years of your life to this franchise business, make sure you are fully aware of what you are getting into. Getting non promotional franchise information is critical. Doing some due diligence will help ensure you are making the decision that is right for you, that the franchise business will support and align with the lifestyle you want.
First, I do understand that the survival rate of a franchise business is much better than going onto a business all on your own. On your own the success rate is about 3 to 5 percent after 3 years depending on who you listen to. And with a franchise opportunity they say it gets much better, there is common franchise information in print stating as high as 97%. Well, at least that’s what some selling a franchise opportunity are saying, but with deeper research it’s no where near that high, maybe 50% at best.
With a franchise opportunity you are essentially paying to get a couple of things. You are usually paying for a proven system, and a known brand name. Now the question about the specific franchise business you are looking at is, how good is the system and even more important, how good is their training and support? The larger long standing companies will generally be better at those factors, but you will certainly be paying for it with the initial buy in cost and ongoing franchise fees. The better the system within a franchise opportunity, the more you pay, although there is not guarantee of this. This is just like anything, as you dig into the right franchise information you will easily see that you get what you pay for.
It is very important to fully research each franchise opportunity you are looking into, don’t just rely on the company provided franchise information. To get a clear picture of the operation, you should get input from both sides of the equation. It would be valuable to contact people actually operating the same brand of franchise opportunity business you are interested in to find out how the franchisor actually supports it’s franchise opportunity. How it interacts with it’s operators, and provides services and support. You might find also that they know other operators of the same franchise opportunity and know about the success and troubles others have had.
The common franchise information shows statistics on success ratios that are challenged by some who indicate gaps in the reporting requirements of how franchise companies have to provide the franchise information. You have to remember, the franchisors want the statistics to look good for the franchise opportunity they offer. Consider making sure that you address all of the following topics so that you are making an educated decision, not just an emotional one. Obtaining all franchise information needed to be well informed is your responsibility.
The most common reasons for franchise opportunity failure are:
Ineffective Franchisor Support
When a franchise opportunity does not have a very good duplicative system either because they are new to franchising and have not yet perfected it, or because they just don’t care to create a really effective system to better ensure your success, the success ratio goes down. Some offering a franchise opportunity are primarily focused on the initial profit and not so much on developing and maintaining a system to help you continue in success, if you fail they can sell it again to someone else. They usually cover this up in all the franchise information they provide to you.
The other way franchisors can be ineffective is with their ongoing support, or the lack of it. As a franchisee it is imperative that you receive very good training and ongoing support with a new franchise opportunity. This is a large part of why a franchise makes sense to invest in. Without adequate training and support the amount you should pay diminishes rapidly. If you are going to have to figure it all out on your own, why would you need the franchiser? You may not be able to survive long enough if you need to figure everything out on your own.
Poor Franchise Opportunity Location Choice
The first three most important factors to the success of a physical business are, location, location and location. It’s quite simple, a good location equals good traffic, a poor location equals lousy traffic. The big question here is who is picking the location and how good are they at this, are you getting all the specific franchise information you should? Many franchise opportunities fail because, in spite of a known brand name, the people do not come. Location can have a big affect on your start up costs, as a good location is usually more expensive. The property owners usually have accurate franchise information, they know the relative value of their location and will charge accordingly.
Going cheap on picking a location can be very dangerous to the long term success of your franchise opportunity. Traffic, visibility and ease of access are some of the critical aspects to consider. Getting the correct franchise information regarding demographics is very important, are there enough potential customers close enough to your franchise opportunity location. The location analysis does vary some depending on the exact business you are looking to open.
Franchise Business Market Saturation
This is where a franchise company authorizes too many locations of a franchise opportunity in close proximity. In my home town, they recently closed 3 Starbucks coffee locations. There were way too many in the area, so none of then were able to operate at a good profit range. And a major chain of ‘sit down’ restaurant closed one in a reasonably good location. but apparently too close to the next one. It takes a lot of sophisticated research and very accurate franchise information to determine unit location, it’s even difficult for the large companies. Make sure you are getting accurate franchise information regarding a proposed location. It may be prudent to hire an independent research firm to ensure the location of your specific franchise opportunity is viable.
Inadequate Business Promotion
Here is one aspect of a franchise opportunity many people miss by a mile when figuring their operating expenses, especially at start up, based on the initial franchise information provided. Newspaper ads, fliers and discounts will likely be needed in mass in the beginning of a new business. And the need increases greatly if the location is less than ideal because of competition, demographics or even same brand competition. Any business, no matter what kind, or form requires a constant flow of traffic so some forms of advertising are usually a constant no matter how long you are established. This kind of accurate franchise information is crucial.
Inaccurate Franchise Information
Good accurate franchise information can be obtained from both ends, the perspective owner as well as the franchiser. You certainly want the business to be a success so it is very easy to over expect what a franchise opportunity is capable of. And, the franchise seller certainly wants to paint a very glowing picture of the possibilities for the opportunity. What this boils down to is money . . . yours. You may not bring in as much income as you had hoped for, thus your fixed costs are a much larger percent of the equation. An accurate advertising cost estimate is very important franchise information.
When you are looking to invest as much as you are in a new franchise opportunity it is very important to do the research as thoroughly as possible, leave no rock unturned. The seller of the franchise opportunity will make it sound very lucrative and even easy to operate, don’t be totally accepting of everything they tell you, take it with a grain of salt, do the research, put together your own franchise information to verify all aspects. Don’t let your excitement for a franchise opportunity cloud your logic.
Perhaps contact owners of existing franchises like you are considering, find out from them how their experience has been. How good is the system provided and how well does the franchiser support it? Respect the franchise information and opinions of people who are already doing it, how is their business, how many hours do they put in? What, if any problems or glitches have they had, and maybe, how they can be avoided by you? These owners may know of other operators and how their businesses are doing as well. Obtaining good accurate franchise information may seem like a lot of effort, but just think of it as an investment in your future. What if you didn’t find out about a crucial point about a franchise opportunity that drastically affected your business, until after you were in a big mess? Miss judging the time commitment, customer traffic, true costs, product or service desirability, location and many other factors can quickly take a good idea into a disaster you are stuck will because of your investment.
The other aspect that should be carefully considered when choosing a franchise opportunity is your time. What are you going to be doing with your time? Will the business require long hours? Will it allow flexibility, the flexibility you want? In thinking about your time, the bottom line is your lifestyle. Does the business model you are looking into fit in with and actually support the lifestyle you want? After all, why are you looking to get into a business of your own? Is it just for the money or do you have specific desires that the money earned and the flexibility will help you attain?
Not only should you get accurate franchise information, but consider your reasons why. One must be careful when looking at a franchise opportunity to get into that it really supports your desired life, otherwise you may be just buying your way into a new income stream with little improvement to your overall life, and the activities you really want to be applying your time to. Many people jump into a business envisioning it as a vehicle to a better lifestyle, and they end up with the same of even more of what they wanted away from in their job. Getting good franchise information is the only way to clearly know.
Starting a franchise opportunity can take up a lot more time than you think up front. A business can also bring on more opportunities for increased stress, with overhead expenses, employees, inventory and dealing with unhappy customers. Many times a franchise owner will end up with less time for home and family rather than more. Careful analysis of the franchise information related to what you want for your life is in order before you can make a proper decision if a particular franchise opportunity is a good fit. Isn’t the idea of going onto business for yourself a way to improve your life? Then make sure that your choice can in actuality accomplish this, and not end up the other way around.
Happy franchise information hunting, there is a good business out there for you that can best serve the life you want. It’s important to get into a business that still allows you to have a personal life at the same time as making good money. Is there a franchise opportunity that fits your needs?
For a viable alternative to a franchise business that is easier to get started, requires less time to operate and actually helps enhance your lifestyle, there is another choice.