Franchising

You can usually find numerous horror stories on the web about individuals starting up a franchise business and losing out as a rogue franchiser takes off with their cash. It's true that this happens however on the other side of the coin there are profitable franchisees operating now with good rewarding businesses. It might seem some are lucky and others are not, still there are a few things you can take into account through the research process of the franchise opportunity to lessen the possibility of hitting on a 'rogue' franchisor and maximise the potential of you turning into a of the success stories.

Think about these 5 pointers when researching a franchise system of appeal.

1. Get the right opinions

Who better to a franchise is good or not than individuals who have actually operated it themselves. The world wide web is becoming a constantly rising voice when it comes down to service levels experienced by consumers on goods and services. A brief search on the internet for the franchise system together with 'review' tagged on the end will more often than not give plenty of results left by folks who have experienced the franchise opportunity first hand, equally good and bad. Getting a listing of existing franchisees from a franchise system you may be really interested in is another way of getting hold of some good insight as you walk along the buying route.

2. Support & Training

Make sure you call in on the head offices of any franchisor you consider. It should give you some helpful insight into their company and whilst you're there you could inspect any teaching facilities and material they might provide. Again, its a valuable question to enquire with their current franchisees, as a good quality franchisor will want to make available as much backup and guidance as required to give their franchisees all the tools they require to be successful.

3. Reputation and Brand

Have you heard of the company? And what type of reputation do they have? This is common sense in reality however its also worth considering that there are lots of smaller, lesser known brands which may well still possess fine reputation and so are still worth considering. Not all franchisors have the resources to brand themselves strongly on TV or billboard however this is not automatically a basis to ignore them if they can show you a track record of industry standing and reliability.

4. Banks Outlook

The franchise sections of the major banks are a useful place to get a hold of a neutral opinion of the franchise opportunity you may be considering. It's possible the bank will often be drawn in as part of the franchise investment because the greater part of possible franchisees will need to have access to money to invest in their new franchise opportunity. The major banks eagerness to lend capital provides a sign of the security they carry in any individual franchise. If the franchise system is well well-known to them and has a respectable track record they will often be willing to lend rather than a franchise that possibly they have no knowledge of or has a bad track record in their experience. The latter clearly affords extra risk to the bank and they may be more cautious to lend capital.

5. Associations

The majority of countries have a franchise association of some sort that can present some level of security when it comes to looking at investing in a franchise. Their activity is to offer some trust in the franchise marketplace as the franchise businesses they support typically need to pass various basic checks to make sure they have established systems as well as a track record of accomplishment. It's wise to check with the franchise association in your country to check if the franchise system you are thinking about is a member and if not has the franchise association heard of them and what thoughts they might suggest.

Lastly, your intuition can't be under-estimated! Do you feel comfortable when you get together with the franchisor, those behind the franchise business. Do they inspire confidence and belief with you? Don't be fooled by promises of speedy, high returns... in fact a franchisor who appears to have more realistic approach about building up a solid long term business is most likely a better opportunity. The people who run the franchise are the ones you will usually be committing to long term so can you see yourself working with them?