How to evaluate a franchise?Presentation Transcript
by Mr Arpit Sharma
Striving for new goals is a motivating way
to get yourself out of the current
economic funk. For many people, these
goals include the desire to start their own
business and become the master of their
destiny, and franchising can fit very well
into that picture.
Mr Arpit Sharma
CHOOSING YOUR FRANCHISE ?
There are four main ingredients found in each business...
•The product or service that is delivered to its customers.
•What is the demand for the product
•Growth in the Industry
•What competition exists and why is this franchise a good choice?
•Business Lifecycle if any?
•Seasonality if any?
•The location that the business occupies.
•The amount of capital that has to be invested or borrowed by the venture.
•The management team that runs the company--You!
Is Franchise Ownership right for you?
If you have any kind of entrepreneurial streak in you, the allure of owning a
franchise can be great .
Top 10 Reasons To Buy a Franchise
Here's how franchises can offer you a jumpstart toward owning your own
• Established Brand and Customer Base.
• Marketing Support.
• Reputable Suppliers.
• Business Support.
• Financial Assistance..
• Access to Proprietary Methods.
• Ongoing Research and Development,
• The Boss is You.
• Reduced Risk.
Established Brand and Customer Base.
Any good franchise company has developed a method of doing
businessthat works well and produces successful results. Even better, they're
required to provide you with a great deal of information in their required
disclosures so you can investigate and verify the results with existing
franchisees prior to making your final decision
Marketing Support :
he franchise company has marketing support to provide you with proven
tools and strategies for attracting and retaining customers. Usually, the staff
helps you develop the actual marketing plans and budgets for your grand
opening as well as your ongoing efforts to market your business effectively.
Franchisors often have established relationships with suppliers for all
the materials franchisees need.
There's a saying in franchising: "You're in business for yourself, but not by yourself"
because you have a network of support.
A good franchise company has training programs designed to bring you up to
speed on the most successful methods to run the business. They should also have
reference materials to assist you in dealing with whatever comes up while you're
running your business. Some of the better (and more expensive) franchise
operations offer management and technical training.
Some franchisors provide loans and other assistance to help franchisees.
•Access to Proprietary Methods:
There's no need to reinvent the wheel as franchisees get access to all the trade
• Ongoing Research and Development:
New Products. Franchisees can stick to improving their operations and let the
franchisor spend the time and money developing new products.
The Boss is You:
As with owning any business that you own, you are in control of your destiny.
• Reduced Risk:
For all of these reasons, starting a franchise of an established brand often has
less risk than starting a business from nothing.
Here are the top 5 key points we think you should consider before you buy into
• 1.Cost: Since the costs of franchises can run from a few Lacs, to millions, the
very first thing you should do is identify which opportunities you can afford.
• 2. Reputation :Ideally, you'd like to look for a business that has a proven track
record, over a number of years, and a loyal client base.
• 3. Legality :Franchise businesses are governed by very specific laws, in every
country around the world. If you are even a little bit concerned about the
contract, have a lawyer go over it
• 4. Royalties :Make sure that they are not so high that they will cripple your
business. Ideally a franchise royalty should be around 15-20% excluding
How to find the Right Franchise?
• First, you must believe in the product or service that
the franchise network delivers. Is the niche stable,
expanding, long-term, saturated??
• Next you must verify the industry's future. What do
the trade papers predict?
• Think about what you're seeking from a franchise.
Part time or full time? What type of business would
you enjoy? Consider your hobbies and passions.
• Figure out your financial resources. What are your
financial goals for the business?
• What experiences and skills do you bring to the
table? Do you have administrative skills or flair for
sales? Then retail franchise concepts can be a good
5 Questions to ask a Franchisor ?
• What is the Mission of the Company?
• How Big Is The Market?
The Franchisor should have a good handle on the available market for the product or
service that you will be offering as a Franchisee.
• Differentiation from competition?
The Franchisor should have a good understanding about the competition, and
differentiation should be immediately realized.
• What Are the Franchisor’s Growth Plans?
You may think that a Franchisor’s growth plans are not important to you once you
become a Franchisee. However, there are a number of factors that illustrate that a
Franchisor that has continuing growth plans will increase the value of your investment.
• Professional Support ?
A Franchisor should support you from the moment you sign the contract to the time your
project open. And the support continues during operation through continuous