Best Franchise Opportunities- What's The Right Business For You?

Franchising: Great Expectations
Every franchisee buys a franchise with great expectations of success. Whether this idea is a realistic expectation is another matter. If franchisees do not know enough about the franchise, it is difficult for them to have realistic expectations. The key to discovering the real story about a business depends on asking the right questions. Look for information from the franchisor and the other franchisees.
Do not expect a 100% straight answer at the beginning. The franchisee’s first contact will be with a member of the sales staff. Franchisees must keep in mind that the job of a sales representative is to guide you to the next stage. The objective of a good franchisor, however, is to ensure that a franchisee makes an informed decision based on all information about the franchise. If franchisees ask the franchisor, they can get most of the answers. With the help of the franchisor and other business owners, it is possible to receive a realistic projection about the business.
If a franchisor ‘guarantees’ success, the franchisee should exercise caution and do a thorough check of that claim. There is no guaranteed success within franchising. There is always a degree – whether very slight or extremely high – of risk in franchising. Many potential franchisees overlook the possibility of that risk. They observe franchises such as the established food chains which have been thriving for 20 or 30 years.
Franchisees must keep in mind that every franchise will not follow the pattern of the top franchises. Even the leading franchises had their growing pains and they have made mistakes such as entering into affiliations with unsuitable franchisees. Although the more professional and established franchises are, the better they are at mitigating the risk, analyzing potential franchisees, and choosing the cream of the crop.
Yet only 30% of franchises achieve that superstar level of success and the other 70% are striving for a top spot. Of course, the lower ranked franchises may just be experiencing growing pains or have not yet been able to identify first-class franchisees. Just as franchisees should not be hasty about buying a franchise, they should also not rush and dismiss a franchise. They should adopt a balanced viewpoint before making any decision.
If a franchise talks about a 35% attrition rate, do not reject the business without getting more detail. Inquire about the attrition – the reason behind it and the date of occurrence. Maybe the attrition happened within the first three years of business but in latter years there has been little attrition. Maybe the franchises were undercapitalized and were affected by the economic downturn or maybe the management has gone through significant change. Dig deep and find all the answers.
In addition, franchisees need to be realistic about the rigidity of the franchise system. They must understand the culture of the company and gauge how challenging the franchise model will be for them. A high process systems-oriented franchisor will expect you to follow exact rules.
If franchisees do not like to play by the rules or follow processes, systems, and methodologies, this business opportunity may not be for them. Yet certain franchisors are looking for franchisees who enjoy creativity, think on the fly, and like to “wing it.” The company culture and the franchisee’s personality type must be a perfect fit.
Franchisees have to be realistic about their comfort level with the company. When a franchisee finds the right business to suit their skills set, they have a better chance of success. It is ok for franchisees to have great expectations – as long as there is a touch of realism thrown into the mix.
By
Richard Verkley