Franchise marketing can be an effective way to develop a new business opportunity quickly with the advantage of having already established brand recognition and expectations. There are also negative aspects to franchise marketing that should be understood. Since you are investing in a larger company, they may have any number of restrictions. Thoroughly investigating a franchise before investing in it can save the loss of many thousands of dollars.
A few of the benefits of investing in a franchise market include the ability to instantly develop a known business. For the franchise fee and continued royalty payments, you are provided with a business model that has already been tested and operational. By purchasing a franchise marketing system you can be minimizing the risk to your investment since the company name is already established. You must realize, however, that you may also be giving up a significant amount of freedom to do business the way you want. Contractually, most franchise businesses have their preferred management and operational systems in place that you must follow.
Before you even settle on the particular franchise market you will be investing in, there are some aspects of the business that you must answer to yourself. You must know exactly how much you have to invest and how much you are able to lose. You must determine if there are partners to work with or if you need financial assistance. You must also work out how you will live while you are getting your franchise market started. Determine your abilities and skills. Know what you are capable of and what you can bring to the job to help its chances of success.
When you get to the part of choosing the particular franchise you wish to invest in, determine such factors as product or service demand in the area you will be dealing in. You must make an honest appraisal of the competition you will be going up against. You must also determine the level of competition with the franchise owner’s own online presence or company stores. What level of training and support will you be offered? You must have an understanding of your strengths, abilities and goals.
Unless you have already set your sights on a particular franchise, it is recommended to shop around a bit to find who offers the most lucrative deal. Attending franchise expositions will give you a good idea of what is available in your area. You can find in one place, details about the costs, as well as fees and obligations expected by various competing companies. You can use the expositions to make contacts for more in-depth meetings later so you can work out the best offer between the available companies.
Finally, investigate the company before you commit yourself and your investment to a particular franchise. The Federal Trade Commission requires all franchisers to disclose certain facts about their company and earnings. You must be given a minimum of two weeks to review this and any other documentation before you are asked to sign a final franchise agreement. Check such things as the length of time the company has been in business and what their background record is. There are many ways to run a check to see if the company or its officers have been in litigation because of unethical business practices. Since you may be doing business with them for many years to come, make sure they are the type of people you really want to be associated with.
