10 Signs You Should Invest in Franchising

10 Signs You Should Invest in Franchising

The world of business is always changing and moving forward. Franchising is now taking the lead as a profitable business venture. A franchise involves owners giving the rights to their trademarks which includes businesses names, logos to a third party. The rights will be shared with parties that most commonly include retail outlets. The investing partners are termed franchisees. Franchisees are required to pay once as a minimum for the rights and will give a percentage of sales and more. Businesses across the globe are working with franchisees including recognizable brands such as Subway.

Beneficial Factors to Investing in Franchising

As with any new business opportunity you will need to know the positive factors and learn how it will be advantageous to you. There are various benefits to becoming a partner in a franchise you can read below to find the leading reasons why you should invest.

  • Experience – With franchising previous experience in the industry is not necessary. You can take interest in a franchise and participate in training to learn how to make your new venture a success. Many franchisees have had different careers from cleaners to nurses and have progressed into a successful franchising business. Training can be provided to any potential franchisee.  
  • Brand Advantage – Investing into a business that already has a strong customer base will be very beneficial. A franchisee with little experience or a lot could use the brands achievements to become more successful. Leading businesses also have an advantage when buying new premises.
  • Support – Starting a whole new business can be overwhelming. By starting your new career in franchising, you won’t have to contend with issues and business start-up alone. The businesses will already have a team in place to manage tasks, provide support and the team will provide important knowledge and experience.
  • The Industry is Growing – It has been stated that the amount of franchises thriving in Australia has risen by 15%. The increase has happened over a couple of years and there are now over 1000 businesses. Profits are increasing which is giving franchisees the opportunity to expand.

What Makes a Good Investment?

It is important to know how to find a good investment. There are a variety of factors that signal a potentially successful franchise and you can find important ones below.

  1. Fast Response – When asking questions and researching it is important that that the franchise responds quickly. You should look for professional and fast responses. Avoid a business that is delayed and difficult to communicate with.
  2. Training – When choosing a franchising opportunity, you need to make sure that they have training programmes in place. Training will give you the knowledge needed to make the investment a success. Franchises should also offer general training about business, this should cover important aspects such as payroll.  
  3. Financial Stability – You need to make sure that the franchise is stable. Check the financial status and look over the financial statements. You can also get an accountant to do this for you. By knowing the financial stability of the business, you can have confidence that the franchise will succeed.  
  4. Marketing – When researching the franchise, you should check for marketing programs. For a business to survive long term it needs marketing to keep the existing customer base and to attract new ones.
  5. Other Franchisees – It is a requirement for franchisors to have details of the past and present franchisees. With this information you can ask questions especially about finance. The financial questions can give you an estimate on profit. If franchisees provide positive information, then you will know it is a good investment.
  6. Assistance with Property – A successful franchise will have connections with businesses in property and construction. Many franchisees haven’t reached the experience required to find a new businesses premises or to have a building redesigned. It is vital that you have assistance with these complicated issues.
  7. Committed Team Members – For any business to be a success it needs passionate and committed team members. Choose a franchise with a team that values and supports the businesses vision and mission. A team that believes in the success of the business will succeed. A franchisee also needs to be fully committed. A business with dedicated workers will go far.
  8. Documentation – A franchise should provide you with the correct documentation. Successful franchises will give you documents containing training procedures, marketing campaigns and more. Avoid franchises without or little documentation.
  9. Business Plans – A successful franchise should have businesses plans and financial models in place. You can then go over these documents and see a breakdown of facts and figures. You can also see the cost of the business and what needs to be payed in. Franchises that are a good investment should have all this information available.
  10. Hard Workers – Good franchises will have an experienced team that works hard. A franchise doesn’t become successful overnight. Look for a franchise with a committed team that is prepared to work at their best to get results.

What Are the Risks?

As with any new business idea there can be risks involved. Some of the risks you should know are:

  • Requires investment – You need to put money into the business before you can get any out. As money is involved it is important that you invest in the right business.
  • Less Control – You won’t have as much control of employees and decisions as you would with your own business.
  • Law – it is important that you know about franchise law and procedures in place. A lawyer can give you guidance on all the important things you need to know.
  • Franchising Can Be a Challenge – Franchising is not as simple as it may seem, so you should be prepared to overcome any difficulties.

If you are serious about investing in franchising, then get advice and hire a franchise lawyer. Franchise lawyers can help your move into franchising be less stressful and more successful.

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