Choose the Best Franchise! 6 Tips to Find Your Perfect MatchMar 28, 2023
People often ask me what is the best franchise in the industry, how to discover which one is better for them, and which one should they buy. The answer to all of these questions can be very tricky because there are many different things that you need to look at to decide which franchise brand is the right franchise for you.
There are many things that you need to consider when choosing a franchise. Even though here at The American Franchise Academy do not recommend any specific franchise, or sell franchises, in this blog post I’ll share six elements that you should consider before you invest in a franchise.
This is what we do. We educate franchise leaders so that they can manage the franchise they have chosen or built so they can be as successful as possible, focusing on the business management and leadership processes to increase their chances for success.
- There are over 3,000 brands in the United States for you to choose from, but there are only a few that are the best for you.
Take a closer look at the following recommendations, which are the elements your ideal franchise must fulfill. As you do this analysis, put your preferred options through this filter to help you select better and discover the best franchise for you. Happy search!
Tip #1: A franchise you like
If the franchise doesn’t pass this element, don't even consider investing in it. You have to be passionate about the product or service you’ll be selling, the employees you'll be hiring, and the customers you'll be serving.
Being a business owner, whether a franchise or an independent, it’s quite challenging. If on top of that, you do not like what you're doing, it will be a nightmare! That’s why choosing a franchise that you enjoy, with customers you care for, a product or service you feel proud of, and with employees that you appreciate, will help you succeed.
Think about it! You are going to be in this business 24-7. This means that even when the business is closed, you'll be thinking about it. So, why not choose a franchise you enjoy and be happy about operating, day in and day out?
Tip #2: A proven brand
What that means is that you have to choose a brand that has a history of success and that you can corroborate is able to operate in different areas, communities, districts, and maybe even in different states or countries.
Another thing you have to confirm is if the brand and its product, service, processes, image, and marketing, are something that consumers are willing to pay you money for.
I can't tell you how much time you need to make sure that a brand is proven because there are some startups that are doing really well and could be the next great thing, as well as mature brands that are declining.
So it is important to look for that track record of being proven and if it has a strong future and likelihood of being successful when it comes to consumers.
Tip #3: A viable business
Before you even start looking for a franchise brand, you have to look at your budget and how much money you are willing to invest. Once you answer that question, then you can see which brands you can afford.
For some brands, you may need as little investment as $250,000 but others will require $1.5 million. And so, for you to narrow down which brands are most suitable, you need to calculate how much you are willing to invest and if you’ll be borrowing money or how much access to capital you have.
The last thing you want to do is select a brand that you cannot afford, or worse, you push yourself to the limits and then find yourself in so much debt you can’t operate the business.
You also have to define how much risk you are willing to take because, at the end of the day, a franchise is still a risk.
Another thing you have to inquire about is if there are any hidden costs you are not aware of. This is critical because some franchises have clauses on investments that have to be made, either in remodeling or in technology. So make sure you investigate all the current and future costs you’ll have to make.
Consider all of this within your financial projections to make sure that the brand is viable for you.
Tip #4: Able to duplicate
Your selected franchise brand has to provide you with the tools, resources, training, knowledge, and coaching you need to duplicate that brand.
That will help you not only learn exactly how to operate successfully but train your team members so that they too can replicate the brand systems with a high level of excellence.
A good franchisor also will give you ongoing support for that brand execution.
Tip #5: A sustainable brand
This aspect is crucial for the long-term success of the brand. What I mean by that is looking for a brand that, even though it may be successful today, has demonstrated innovative abilities to keep up with the times.
The reality is that things change, people change, economies change, and countries change. And brands have to be flexible and innovative enough to reinvent themselves so they can evolve with the industry and continue to grow and be attractive to consumers, employees, and business owners.
Tip #6: A lucrative business
Most franchisees don’t do enough work to investigate this particular element to see if their preferred brand is truly lucrative. But especially nowadays, with the inflation and all the cost of goods and labor cost issues, there are many things that affect the bottom line of franchises so knowing this is critical.
You need to do your due diligence to make sure you’ll receive the money you expect out of the franchise investment. For you to do that, first you need to define what is the minimum you would like to have in cash and cash returns. Then, put that objective against the financial analysis of the brands you're considering. Those that do not meet your goals must be removed from your list.
Those are the six elements I recommend you should look for before investing in a franchise or becoming a multi-unit franchisee. I hope this was helpful to you! Get more information and valuable recommendations to help you in your franchise journey by subscribing to our YouTube Channel and our Franchise Success Formula podcast on Spotify.
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- Do you see yourself operating your selected franchise brands for many years?
- Have you confirmed that the brand will help you achieve your financial goals?
- Is the franchisor giving you the tools, resources, and training you need to duplicate the brand correctly?
- How much risk are you willing to take with this investment?
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