Qualities of Good Franchise


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Qualities of Good Franchise

  1. 1. As a buyer, it is essential that one chooses a business that provides best of the options; of course franchisee has to balance between their investment capacities and the qualities of a prospective business, however there are some key determinants that vouches for the quality of a franchise business whatever be the size. It is hence an important task to analyse if the franchise possess such qualities. When you have shortlisted the types of franchises you’d like to invest in, you have to conduct an in-depth analysis of the individual business adopting numerous methods such as online, visiting a franchise, visiting main business centre in case of small and master franchise in case of a bigger business.
  2. 2. Key determinants of track record are the comparison between the age and growth of the business over the years. The performance of the business especially in the past few years and rate at which it has grown. A complete track record analysis relating to finances, legal battles if any and other franchise performance will help in gauging how established the business is.
  3. 3. The product or service or both of the business has to be flexible to the changes in external environment and at the same time adaptable to newer technologies. The Franchisor especially should be upgrading to the latest technologies and introducing new products and services at regular intervals and it is essential characteristic of any business. Franchise business, being very competitive in nature this becomes an important quality.
  4. 4. Brand image is the centre of franchise business model. The brand image has to be strong, well known and positive at large. The same could be determined by looking at the demand for the product compared to its competitors, reviews by people and other business and the franchisee themselves, ranking of the business in specific industry and so on.
  5. 5. The current day franchise business spreads beyond boundaries of the nation and the continent; a well developed business will study the local markets and customise its products to meet the needs of the local market. This is essential as a franchise could be successful only if it meets the local needs especially if the product cannot create market for itself. For example a McDonald franchise changes its ingredients at least a bit to suffice the palette need of local community in Sri Lanka or Indian Institute of Hardware Technologies (IIHT) is flexible with courses that are best suited for the market in Malaysia.
  6. 6. Franchise comes at a cost, a cost that is charged by the franchisor for the sale of the trademark, authority and in many cases intellectual property. There are fees such as royalty fees that is ongoing in nature and is common to any franchise business, however, frequency varies from business to business and usually some franchises charge fixed fees and some a percentage on profits. Other charges also come into picture as development fund for marketing in the region or process upgradation. Even though such charges are normal, it is essential to understand if there is a balance between franchisor’s and franchisee’s growth. It is important to know if the franchisor has a record of coming up with frequent and unreasonable charges.
  7. 7. Many franchise businesses such as Subway, IIHT Franchise, Jan Pro, Euro kids and many such franchises are known for their transparency and introduce lot of materials on understanding how franchises work that could act as a secondary resource.
  8. 8. Corporate Headquarters #15,Sri Lakshmi Complex, 4th Floor, St. Marks Road, Bangalore - 560 001. India Tel: 91 80 6160 4545 e-mail: franchise@iihttechnologies.com web: www.iihttechnologies.com/