How to buy a franchise
Franchise is one of the popular ways of doing business today. But before you buy a franchise, you should carefully examine all the details of the work. Even the most famous brand will not give an absolute guarantee that the business will be profitable and will pay off very quickly. After conducting preliminary studies, analyzing the situation on the market and preliminary preparations, it cannot be said for sure that this particular brand will bring profit. There should be a number of other circumstances.
In which industry to take a franchise
There is a well-known saying that the ideal job is a highly paid hobby. And if a person is doing his favorite thing day by day, he will never get tired of his work.
Indeed, buying a franchise simply because it is fashionable, at least not logical. The first step is to determine the scope of business. It must be chosen on the basis of their own interests and preferences. This should be the industry about which the buyer has an idea. At this point, you can highlight for yourself all the pros and cons of franchising. If the company already has several points in the city, you can evaluate their work. A great opportunity to learn about the company from the inside – to work there for a short time or get an internship. Thus, it will be possible to foresee the difficulties that may arise in the process of work.
Note! You should not buy a franchise for recognition only. It is better to choose a company loyal to your partners that will flexibly react to changes in the market.
Selection of activities
Properly chosen industry is half the success. Do not invest in the sale of highly specialized goods. To enter the market, where already a large number of competitors is also not very true. You should not start a business in the area that regularly faces a collapse in prices. Over the opening of the seasonal business, too, should once again be a good think.
Company – franchise this issue should be treated very carefully. Studying the features of the company, you need to pay attention to the number of units for sale. So, if a company sells too many places, it can be a warning sign. There is a possibility that the franchisee company is trying to get rid of unnecessary offers, attracting customers by the price.
Before buying a franchise, you should carefully review the company data. It is better to study not only the information on the official website of the organization. Much attention can be paid to third-party resources and forums on the Internet. It may be possible to establish contact with other enterprises, also operating under a franchise.
The presence of several negative reviews can not pay attention. Even on the best offer there will always be dissatisfied. But if the company has a scandalous reputation, this is a reason to think.
Company experience in the market
Even if the newly opened company offers very favorable conditions for joining the network, this proposal should be very carefully considered. Not always the minimum down payment will make a profit in the future.
The best company to buy a franchise is a network that has been operating for more than five years and has at least thirty branches. As an exception, you can consider a new franchise network created under the control of an experienced businessman who managed to gain confidence at work with other well-known brands.
After the company has been selected for entry into the network, initial negotiations have been held, it is necessary to sign a document on the disclosure of the franchise. As a rule, representatives of the franchise send it in electronic form.
Despite the fact that the document contains a lot of information, you should pay particular attention to the following points:
the conclusion of the contract;
the duration of the franchise;
termination of an agreement.
If at least one of these points causes disagreements, you should look for another organization to join the network.
Virtually any existing franchise has ever been litigated. If possible, find out the reasons for disagreement. In the event that the franchisee made similar claims on the work, it is better to refuse the services of such a company.
Interesting information can be found by analyzing the work of the franchisee over the past year. So, if more than five percent of the points were closed, this can be a great reason to think about the profitability of the business.
Also in the document on the disclosure of the franchise will be interested to learn about the financial activities of the enterprise. Since this information is optional, only successful enterprises show it. An organization that is experiencing temporary difficulties is likely to simply exclude this clause from the document.
Ideally, the income statement and a detailed list of expenses should be indicated in the franchise disclosure document.
It is important that in these indicators do not specify the cost of doing business – wages, rental of premises, taxes, materials and other mandatory payments.