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Researching a Franchise

To Buy, Or Not To Buy

Here are five questions you need to answer before choosing a franchise.

Kyle Zagrodzky

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If you’re in the market for a franchise, there are loads to choose from. Those looking to become part of a franchise have to sort through everything from childcare to pizza, salons, gyms and medical facilities. That’s a lot to narrow down.

As potential franchisees make sense of all the information and start finalising their top picks, they often neglect to notice a key factor in the decision process: How many questions do franchisors actually ask them?

People making a choice as big as becoming a franchisee have so much on their minds and so many questions to answer that they may not focus enough on the way franchisors interview them.

Not all franchises are created equal, and the way a franchise gets to know you will tell you a lot about its culture. Ideally, you want to work with a franchise that is as interested in you as you are in it. The questions they ask (or fail to ask) can tell you a lot.

Above all, franchisors shouldn’t just want to take your money. They should be as deeply invested in building a successful business as you are, and the questions they ask say a lot about the kind of experience you can expect.

Here are five questions a franchise should ask potential partners:

1. What is your professional background?

Franchising is such an interesting business model because it attracts people from all kinds of backgrounds. There isn’t just one type of person who becomes a franchisee, so a good franchise will want to understand your previous experience to make sure you have what it takes to be a successful part of their business.

Some franchises look for a particular segment of past experience, but most will look at each franchise candidate individually.

If a franchise doesn’t care about your past experience, it’s a sign that they’re not choosy about who becomes a franchisee — which also means they aren’t as likely to be invested in your success.

2. How much time do you have to spend on the business?

Every franchise will have different guidelines for how much time a franchisee should expect to spend on the business. Some franchises are higher maintenance than others. It all depends on the type of product and service, the franchise’s culture of how involved each franchisee will be personally, and how easy or complex the business is to set up and run.

A basic mall kiosk will be easier to manage from a distance, but a retail unit that will be built from the ground up as a standalone store will require more time and legwork. Make sure the franchise cares and asks how much time you’re willing to commit.

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3. What do you hope to accomplish?

If you expect a franchise to be profitable in a month, and the franchise generally isn’t profitable for a year, it’s better to get that out in the open before you sign on the dotted line. Great franchises know how to manage expectations so that franchisees can stay positive and know what they’re signing up for.

Franchising isn’t a magic bullet of profitability. It’s a business like any other, and most businesses take time to earn profits.

The franchisor should also want to know if you have plans for expansion, since that should lead to in-depth conversations about territories and development. If a franchise makes promises that don’t seem reasonable, take a step back, and do some more research. It’s better to work with a company that is up-front about what you can expect than one that makes assurances and might not be there with support after you’ve joined
the team.

4. Why are you interested in franchising?

People get into franchising for all sorts of reasons. Sometimes they have always dreamed of entrepreneurship. Sometimes they want to take more control of their careers. And sometimes they are looking to segue out of another career.

The thing is, most people aren’t actually well-suited to running a franchise. Franchisees need to have a unique personality that can walk the line between visionary and team player. If you want to call all the shots, do things your way and build a brand from scratch, you might be happier with start-up entrepreneurship. If you are looking for the support of operations systems, sales practices and complete marketing and training tools, franchising is a better way to go.

Franchising doesn’t offer a guarantee of success, but merely a template for running a successful business.

A good franchisor recognises that and will only work with people who are a great fit for the franchising life.

5. Why are you interested in this particular franchise?

A lot of people get into franchising because they think it’s a sure bet for running a profitable business. However, the allure of profitability shouldn’t be the only reason you’re interested in a franchise. If you’re lactose intolerant, you aren’t the ideal person to open an ice cream shop. However, if you’re lactose intolerant and the ice cream shop sells products made exclusively from coconut, almond and soy milks, you might be perfect.

Running a business is about making money, but to do that well, you have to be passionate about what you’re pitching. The best franchises know every franchisee is passionate about the brand, not just the profits.

Kyle Zagrodzky is president of OsteoStrong, the health and wellness system that boosts bone and muscle strength in less than 10 minutes a week using scientifically proven osteogenic loading concepts. OsteoStrong introduced a new era in modern fitness and aging prevention two years ago and has since helped thousands of clients between ages 8 and 92 improve strength, balance, endurance and bone density. In 2014, the brand signed commitments with nine regional developers to launch 500 new locations across America.

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How To Become A Hi-Q Franchisee

Are you looking at investing in a tyre replacement and service industry? Look no further than the Hi-Q franchise.

HI-Q

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Established in 1999, Hi-Q is a successful and diverse multi-product, multi-brand leader in the tyre replacement and service industry with a network of over 130 franchisees nationwide.

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With the support of international tyre giant Goodyear, Hi-Q has established a solid reputation of ‘the one you can trust’, and the Hi-Q approach and philosophy is embedded in this.  We have the trust of our customers, our network and our suppliers – that’s why you can trust us to take you and your business to the next level.

When you’re working with people’s safety, trust forms the most significant part of the equation

Hi-Q introduced the original and innovative TyreSurance initiative – the only aftermarket tyre damage guarantee product that backs the consumer no matter the brand of tyre.

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Related: We Want To Invite You To Join Us On The Hi-Q Journey And Become A Franchisee

Each Hi-Q Franchise offers a broad range of brands within the different product and service categories that customers know they can trust, and at prices they can afford. Product and services include tyres, exhausts, shocks, batteries or brakes, wheel alignment or balancing, and a 10-point safety check.

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We have identified areas of opportunity to extend our Franchise footprint growth.

If you are looking to join a new franchise and you share in our values and vision, we would like to hear from you.

For further information on how to become a franchisee, call us on +27 11 394 3150

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Researching a Franchise

Col’Cacchio – Benefits Of The Franchise Model

Six key benefits of the restaurant franchise model – and what to look out for when considering a franchise.

Russell Otty

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For investors looking to the restaurant industry and considering a franchise knowing it has a proven track record and is therefore possibly a lower risk, there are a few key things to be aware of about the benefits of the franchise model, which if investigated, can also point to a franchise that is not for you.

Russell Otty, Chief Operating Officer of the Col’Cacchio Group, shares some of these key benefits and indicators of whether a franchise is for you:

1. Making the cut as a franchisee gives you the confidence that you are making the right decision

You may think psychometric testing, three days in a restaurant following a franchisee around, and a panel interview with the senior management of the franchisor, is a bit over the top, but the franchisor that puts you through your paces and assesses your ability and commitment to running the business, is doing you a huge favour and may even help you see this is not for you. It goes both ways, and after an intense courtship, you should know if you want to try a long-term relationship.

Related: Col’ Cacchio: A Passion For Pizza

2. Assistance with location selection and negotiation of the terms of your lease

One thing you can do to limit your risk is to not open a restaurant in the first place if your rent is not going to be reasonable or you simply won’t get customers through the door. The franchisor will vet and approve the site – they will have extensive insight into what has worked or not worked location-wise for their brand, and can assist you to weigh up the area and it’s potential to attract customers.

The commercial terms of a lease is very important – you can’t be too ambitious about turnover targets, and having the backing of a franchisor can be beneficial if a landlord becomes unreasonable.

3. Staff training and development tools on hand

Consistency is important with restaurant franchises, as a customer visiting a brand anywhere in the country, goes there knowing exactly what they are going to get. This is best achieved with solid training, perhaps access to resources such as training videos, and regular visits from franchise managers.

You should check with your franchisor what level of training and franchise support you will have on an ongoing basis. Ask about the ratio of field trainers and operations managers to the number of franchisees in the group. You want the franchisor in your restaurant in some shape or form, two or three times a month, whether it be the training manager, the regional franchise manager or the national operations manager.

4. Access to supplier networks to manage your input costs

Negotiating basket pricing with distributors regionally and nationally, the franchisor will leverage their buying power on your behalf. They should assist to manage your suppliers and make sure deliveries happen on time, and ensure that product quality remains consistent. They can also negotiate to ensure your input costs do not increase before the next menu launch – so you can ensure your margins remain intact.

5. Brand loyalty and locality marketing

When you buy a restaurant franchise, you gain a group of customers who know who you are, the food you serve and the way you make them feel. The money you will pay towards marketing each month gives you insight into the broader restaurant market, the experience of what is working across a number of sites, and how best to keep the attention of new and existing customers.

Some franchisors offer locality marketing assistance – your site and area has specific needs that other outlets may not have, or there may be events in the area that can be leveraged to run special offers. Ask if the franchisor offers this as a service, as it can assist you greatly to have an advantage over other restaurants in your area.

Related: Beginners Guide To Digital Marketing In South Africa

6. Business development insights

The franchisor has access to insights gained across the group, and the systems that they have in place to track costs and increase profit margins, can be of huge assistance. If you are looking for business support, a franchise manager can be the one sitting with you telling you that you spent R2 000 too much on cleaning this month or saying you need to wait till next month to make that purchase. The level of business support you will have access to, is an important factor to consider, depending on the level of support you may require.

Recipe for success

Nine times out of ten, a restaurant franchise that fails, fails because the franchisee loses interest or lacks the commitment to make it work. Selecting the best franchise for you as the investor, or as a restaurant entrepreneur, is the most important first step you can take towards success, so do the homework.

Don’t assume that because you are buying into a successful brand that it will be a success – business is not an exact science – you need to do your own due diligence and take responsibility for your business, because it is after all your own investment.

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We Want To Invite You To Join Us On The Hi-Q Journey And Become A Franchisee

As the leader in the tyre replacement and service industry, we are invested in providing our network with the tools needed to thrive and grow in an ever-challenging market.

HI-Q

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This is an invitation to all innovative entrepreneurs who are seeking new and exciting opportunities – here’s your chance to become part of a winning team.

As the leader in the tyre replacement and service industry, we are invested in providing our network with the tools needed to thrive and grow in an ever-challenging market.

The Hi-Q Way

  • Hi-Q’s been voted the 1 tyre retailer by South African consumers in the Ask Africa Icon Brands Survey from 2010 – 2017.
  • Over the years Hi-Q has established itself as ‘the one you can trust’, with customers, the network and suppliers.
  • Hi-Q prides itself on first-class service, a multi-product/multi-brand offering as well as ground-breaking product innovations such as TyreSurance on all tyre brands.
  • Hi-Q has an extensive network of over 130 franchisees
  • Hi-Q has the support of the Goodyear value proposition.

If you are looking to join a new franchise and you share Hi-Q’s values and vision, please get in touch.

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