How To Spot A Good Franchise Business

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How To Spot A Good Franchise Business

?Many people always ask what is the best franchise business to invest in. Often the basis would be on the price; something affordable and within the range of one’s pocket. There are also those who based on what one’s neighbor invested who are in other words just follow the leader.

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Investing in a franchise business entails giving time to understand and weigh different circumstances.?Impulsive decisions are definitely a no-no. Thus here is what I see as timeless signs which may be a good indicator. Please note though there is still a need to have due diligence.

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1st A franchise business born out of a Successful Model . Franchising is a scheme used by many entrepreneurs to help expand their businesses. To embark on a franchise business expansion means there is an existing model to serve as the basis. Establishing the business is just one step. The other step is to ensure the products/services are acceptable. The model also calls for identified customers, location parameters as well as a healthy financial bottom line.

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2nd There are established Systems and Procedures. The business model becomes the basis for identifying and establishing systems and procedures. The franchisor ensures factors are carefully followed to ensure a smooth flow of the business. In successful franchises, these are compiled into manuals. Revisions are done if they will help improve in achieving efficiency.

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3rd The Franchisor has identified Vision and Directions.?Opening a business for the franchise is like opening one’s gate to the public. Interested parties begin to pour in and inquire about the amount to invest as well as other details. Beforehand franchisor must have clear directions as well as how he intends to grow his business. There are franchisors who may simply want to open a few branches with specific locations in mind. The size and manner of the conduct of business are specified.

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4th The Franchisor has identified the criteria for choosing a franchisee. For many years, I have always likened getting a franchise to entering into marriage. The business may be successful. However, the key element is making sure there is a synergistic relationship between the business owner and franchisee. I have seen franchisors that because of sheer impatience disregarded the importance of classifying the franchisee. Everything is all about money. This is absolutely absurd! Thus this type of franchisor never lasts a decade. The successful key is to be able for both parties to have a complete understanding and expectations.?There are franchisors too who aside from their desire to get a hands-on franchisee grants only additional branches on the basis of performance and compliance. I have seen franchisors that do not like to have too many franchisees. Instead multiple branched operated franchised stores. Better to talk to a few than one person per store.

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5th The franchisor always checks and improves support services. When a business grows, the backroom support grows in tandem. In other words, from product preparation, staff training, and development to marketing, the entrepreneur has prepared projections. Seeing inconsistency in the branches or a lag in customer service are signs of problems with the head office. In fact, in successful franchise businesses, there are assigned compliance officers who maintain vigilance and little room for error in the system.

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6th The Franchisor maintains communications with franchisees and organizations.?I have seen franchisors that are always available to everybody. In fact, they may be seen visiting and rubbing elbows with franchisees, employees, and even those behind the scenes. There may be key people assigned accordingly but these franchisors would also want to have first-hand experience.?I was surprised when I walked into one of the food chains and saw the franchisor attending to customers as a cashier. When he saw me, I was told he wanted to see how effective the newly installed POS (Point of Sale) systems his company purchased were. Oh, by the way, he was not just there for a minute. Aside from wearing the company uniform, he worked one shift.

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The next time, one would like to invest in a franchise business, check out the timeless signs.