Tips for choosing a successful franchise

Tips for choosing a successful franchise

The time has come. You did your numbers, consulted with your family and friends, and made the decision to become independent to start your own business: You want to start a franchise.

However, at that moment, a series of fundamental doubts usually appear. How to choose the right one? What will be the most profitable franchise? What should I know before?

Having doubts when investing in a franchise is not a negative thing.on the contrary, is the way to start.

Below we share very important tips when choosing which franchise to start with:

1- Choose something that you are passionate about

Above any other decision, you should be passionate about what you choose. It sounds cliché, but enjoying what you do is a cornerstone of any business. When you decide to become a franchisee, opt for a sector that attracts you.

2- Know your positioning

One of the first questions you should ask yourself is how well known is the brand: By investing in a franchise, beyond receiving a profitable business model and acquiring the know-how that the franchisor can transmit to you, you are also acquiring public recognition of the brand. It is important to understand this, and above all to be able to size it and take it to the place where you are going to install the franchise. Maybe it is a super recognized brand in some city, but not so much where you want to take it.

3- Obtain information about your reputation and history

Investigate everything necessary to clear up doubts:

Is the product or service offered by the franchise quality? A quick poll among your friends, family or acquaintances could give you more precise information. You can also make a personal test as a client or inquire about the user experience (positive or negative evaluation).

Talk to other active franchisees of the brand so they can tell you about their own experience. There is no one who can give you better information than a franchisee who already operates the brand.

Find out about the level of openings and closings of the different points of sale of the franchise. This will help you define the risk associated with the investment. For better or worse, failures count too. If you can, investigate if there were franchises of the brand that did not do well and try to find out the cause to avoid making the same mistakes.

4- Obtain economic and financial information

The first thing you have to know about a franchise in terms of numbers is What total investment does it require?. Depending on your financial capacity, this information will allow you to see if the franchise is viable for you. If it is within your possibilities, start analyzing in detail other indicators such as: business profitability, royalties paid, and investment recovery time, etc.

All information must be available and, most importantly, it must be clear. It must be reflected and described in the contract you sign.

5- Franchisee, active or passive?

This is a key issue: we are talking about the dedication and time that the franchisee has to allocate to the business.

Does the franchise require the franchisee to be full time running the business? A large majority of franchises require that whoever buys the franchise also work. This is because the business model is not profitable if you have to hire an employee to take charge of the administration.

Therefore: analyze the model and the numbers, understand if it requires the franchisee to be active or not, and define the degree of dedication that you will be able to give to the business.

6- Find out about the benefits

I have very much in mind the deal that the brand has towards its franchisees.

Do you provide training? Legal and commercial advice? Do they have a good after-sales agreement? Do they accompany you with marketing and advertising campaigns? How do they support you?

Finally, keep in mind that not only a well-known brand name will project good profits and profit margins. Is not always that way. There are many projects in expansion and growth, perhaps with less publicity, that have a lot of value and potential.

Today Argentina registers more than 1,600 franchisor brandsyes of different areas, investment ranges and business proposals.

On the NegoZona portal you can find some of these franchises available to undertake, with a very important introduction to their business model, required investment and many things that may be of interest to you, as well as direct contact means. In addition, the franchise search engine allows you to filter by brand, category and investment range.

Although there is no exact formula to choose the ideal franchise, what you can do is take these key tips to choose the best one for you and start your life independently.

Source: Ambito

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