According to Brisbane Times, an Australian business website, there are 7 steps that businesses should follow before they commit to a franchise business. As a company that helps franchises manage their territories and assess their markets, GbBIS takes a look as these 7 steps and how they can help you choose the right franchise.
1. Test Your Enthusiasm
According to the experts, this is where most people go wrong when choosing a franchise. Too many people get into franchises thinking solely of the profits. But without a product or service that you are truly passionate about, money can’t always sustain your interests in the long run.
2. Meet Your Fellow Potential Franchisees
The most successful franchises are ones that rely heavily on the system; where the franchisees share their knowledge and help each other out. You should contact other franchisees even before you meet with the franchisor.
3. Think Thrift
Cost is absolutely critical. Make sure you can afford your franchise. And even if you can afford it, make sure you can withstand a six-month long low-growth period—as many franchisees often go through.
4. Collar the Owner
Get as much information from the franchisor as possible. Many franchisors ‘clam up’ after the disclosure document has been issued. But make sure the owner is willing to discuss and queries you may have.
5. See if the Banks are on Board
If one or more of the big banks routinely lends money to potential franchisees needing help getting started, that’s a good sign. It shows the banks have confidence in that franchise
6. Check the Churn Rate
A franchise with a high franchisee turnover rate or continuing disputes with franchisees is suspect. The disclosure document should expose these incidents
7. Beware Obsolescence
Make sure your franchise can keep up with the times. A franchise operating in a market undergoing fundamental change could be problematic if the franchisor fails to move.
Though these steps are important, several points were left out of Brisbane Times’ article. For one thing, demographics play a huge role in the success of a franchise; as does location. Knowing where your customers and competitors are in relation to your locations is vital to your franchise’s success.
GbBIS has been helping franchises better manage their territories and markets for over 25 years. Using the most accurate demographic data, GbBIS can help your franchise identify where your customers are, and assess the best location for your store. With maps, web applications, and reports, we can help you find how close you are to competitor locations, and find how that will affect your business.
Contact GbBIS today and discover how our data can help you in selecting the right franchise.
Visit Us on the Web at gbbis.com
Call Us at 1-877-447-6277
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