Although data demonstrates that there is a better chance of success for new business owners if they begin as a franchisee rather than starting a new business from scratch, there are still some factors to take into consideration before deciding which franchise to invest in.
Franchising Process
Potential franchisees should have a basic understanding of how organizations evolve into franchisors. Initially the franchising idea occurs once a successful company wishes to expand it's availability of product or service to a larger geographic area.Once the franchisor experiences success with opening the first 10-25 units, the company can then branch out further into the next stage.
Initial Research
A potential franchisee should thoroughly investigate the history of the franchise. Find out what stage of expansion the franchise is currently in. Have they survived the initial 10-25 units?If they are at least on the second stage of growth (past the first 25 units), they should have built a solid infrastructure that will provide decent support for you to operate your franchise. With franchises at this level, you will have a better chance for success.
Franchise References
Once you have narrowed down your choices, it is very important to talk to other franchisees within the organization. You may wish to speak with at least three or four franchisees that have been with the organization for a decent period of time (at least a year or so).Ask them very specific questions. Find out if they have achieved their financial goals. Inquire as to how they feel the support within the organization has been. If you find that the franchisees have been happy with the communications and interest shown by the franchisor, this is a good sign. This demonstrates that the franchisor is aiming for long-term success by supporting those within the organization.
