Franchising is a great way to own and operate a business without building it from scratch. It allows entrepreneurs to use existing brand recognition, operational processes, and resources. However, choosing between competing franchises can be daunting.
Each franchise offers different products, services, and operational requirements. Researching and comparing them is critical to ensure you make the right choice. To make this process easier, having a list of targeted questions is important to help narrow down your search and evaluate each option thoroughly.
Questions about the opening investment, royalties, brand recognition, training, and support are just a few of the subjects you should consider. This article lists four key questions to ask when choosing between franchises.
1. How Much Money Can You Make?
Knowing your possible income is key to choosing the right franchise. Ask what the franchise’s average income can generate and compare this with other franchise opportunities. Also, find out the typical start-up costs and required savings, such as franchise fees, advertisement and marketing expenditures, and additional overhead expenses.
How much control do you have over pricing and other occupational decisions? Do royalty rates vary depending on sales? What type of operational support do you receive, and how often? Are there any restrictions on franchisees that could directly affect profitability?
2. How Good is the Marketing Program?
It is essential to evaluate the marketing program provided by a franchise. Specifically, the potential franchisee should inquire about the detailed marketing plan, including what type of promotional campaigns have been successful, digital and traditional marketing tactics currently used, and if any new or additional marketing initiatives are in the works.
Additionally, it is supportive of recognizing the level of support the franchise can deliver to grow the franchise’s customer base and which markets the franchise is targeting to reach new customers. Finally, the franchise must have adequate monetary and personnel incomes to help it flourish in its marketing efforts.
3. How Strong is the Ongoing Support?
When evaluating potential franchises, it is vital to ask about the ongoing support offered by the franchisor. Franchisees need access to guidance on marketing, operations, and other areas of business operations. A good franchisor should assist with store openings and ongoing staff training and provide regional marketing and promotional activities.
Your franchisor should also have a clear policy regarding disputes, compliance issues, and product quality. By learning more about the franchisor’s support network, you can determine how confident you can be in the long-term success of your business.
4. How Well Does the Franchisor Prepare New Franchisees to Succeed?
The quality of the franchisor’s preparation is one of the most important things to consider when choosing between franchises. Excellent franchisors should provide thorough training and support materials on managing your business.
This should include the types of products, services, and support you can expect, the financial matters’ ins and outs, and marketing expectations. Also, look for a franchisor that assists in setting and accomplishing goals, accessing financial resources, and learning about industry trends. These measures can help you make the most of your chosen franchise.