Five ways to choose a franchise
Franchise Business has become a new trend in the competitive market in today’s times. Almost every business organization looks for franchise in order to better their revenue prospects and brand marketing. Franchising also enhances the brand value of the organization and allows it to improve their customer base and financial prospects. However, choosing the right franchise is not an easy task and it requires special knowledge and techniques. If you fail to choose the right franchise for your business, then your business may face adverse effects in future. Hence, as a business owner, you must know how to choose the right franchise. Let us look at a few ways in choosing the franchise.
1. Return of Investment (ROI): No business is conducted for charity. Hence, it is extremely important to be clear about your revenue expectations beforehand. While choosing the franchise, make time to study the plan properly and carefully. Understand the business prospects and identify the area’s which can prove to be beneficial for your company. Try to understand the monetary gains which will be generated from the franchise. Check whether the revenue generated is more than that of the investment made.
Moreover, strategically identify key processes which shall benefit your organization.
2. Business Management: While deciding on the franchise, business management has to be clearly decided. Business management includes sales and marketing, conducting strategic business processes, delivery and support, customer interaction etc. These activities are vital to achieve overall success. Business management should involve strategic practices such as cost optimization, boosting of sales and increased revenue generation keeping in view the profit and loss aspects.
Hence, business management should be conducted by skilled employees who can bring the best to the table.
3. Review’s from existing franchises: Before investing in any franchise, conduct a study and analysis of the existing franchise’s of your domain. Keep a careful observation on what is actually happening with such franchises. Understand cost benefit analysis, risk management and procurement management to keep you on the safer side. Try to figure out what mistakes are occurring and learn from them. Develop skills to understand business better with an open mind and accept ideas of your area. Keep a check on their profit margin, things which are proving to be beneficial, annual statistics, customer base etc. Through these review’s, you can better manage your franchise and avoid mistakes which can ruin your business prospects.
4. Support given to franchise by the brand: Before you decide on the franchise, it is of utmost importance to clearly decide on the support offered to the franchise. The franchise will run the business on the name of the parent organization and will also pay a share of its revenue. However, the costing required to run the franchise should be beared by whom? Brand or Franchise. Therefore, be very clear on what support you will be offering to the franchise. Goods, marketing, finances, sales, premises etc are some of the important aspects which should be decided. If you happen to support the franchise at a high level, then the ROI from the franchise should also be high.
5. SOP Manuals: As you know that the key to run any business successfully is to have a well written, formatted, structured and clear Standard Operating Procedures (SOP) to smoothly conduct daily business activities and processes. SOP’s require careful designing and honest implementation.
Hence, decide on whether SOP manuals will be provided by the parent organization to the franchise or not? If the franchise lacks skilled employees, then it is better to offer SOP manuals by the organization to achieve overall success.
About YRC: YRC is a Management Consulting Company, especially for the B-C Sector. Our expertise lies into designing of Standard Operating Procedures (SOPs), Franchise Development, Strategy & Operations services, Process Audits & Training.