Hi! My name is Oleg Kulik, I am a marketing specialist for the CitySites team. Today I would like to talk about the 5 steps that I recommended to make willing to buy a franchise.
- Realistically assess your financial capabilities
When choosing a franchise, pay attention to the lump-sum (introductory) fee, the amount of investments and royalties. Specify the payback period, and put in your budget at least 2 months of payment of royalties in advance, if something goes wrong. This will not burn out in the case when you will be a step away from success. Unfortunately, there are quite a few such examples.
- Discard scam
conditionally franchises can be divided into three groups: white, gray and black.
White - when the franchisor is doing a transparent job, and makes true promises about the prospects and profits.
Gray - franchisers intentionally (or unintentionally) overestimate the number of open points, the documentation is framed with errors, the business model does not make a profit. Often the cause of such problems is the rapid growth of the network of franchises. It should be understood that too rapid growth is not always a plus in the bank of franchise benefits. From time to time there are "booms" of franchises, due to a sharp surge in demand for the product. The enormous growth rates of the external must be supported by the growth of the internal governing structure. Without it, you will be left alone with your problems, the franchisor simply cannot cope with all partners. Therefore, be sure to ask the number of support-department employees if anyone is going to help you at all. Yes, and the internal control structure as a whole.
Black - when the franchisor is just a fraud. His goal is to pocket your capital, often legally.
How to properly assess the authority of the franchise?
Be sure to read about the franchise on the Internet, except for the official site. There are other partners - phone them. All good companies can provide you with several contacts of their franchisees.
- Analyze the market
Almighty Google will help to find out how competitive niche you want to go. In addition to the number of competitors, carefully review the quality of the services offered (offers). Compare them with those that you will provide for the franchise. Assess your future competitiveness.
Think about whether your service will be in demand in 5, 7 and 10 years? A lot of examples of short-term interest in a particular topic (for example, quest rooms, anti-cafe), which paid off, even began to bring profit ... And that was all. There is no interest, the project has to be closed or invested in additional investments.
- Buy a franchise!
No matter how trite it may sound, you must first buy a business. Procrastination can cost you money (the rate has fallen, some unexpected expenses, etc.), make a decision quickly and carefully. The most difficult is to take the first step. It’s like going to the gym for the first workout :)
Please note that buying a ready-made franchise business is first and foremost working on a business model, a built plan that has been accumulated by the time and experience of the franchisor. And in order for it to generate incoe, you must follow step 5.
- Follow the business models.
Carefully study the ways of earning money on the acquired business. Yes, you can often have your own opinion, and you have the right to it. But there are a number of aspects: the deviation from the model must necessarily be agreed with the franchisor. Do not make other people's mistakes if someone has already committed them for you. Use someone else's experience wisely. We in the City Sites have 90% of critical situations only due to a deviation from our business model.
Listen to your franchisors! Everyone is interested in success, and for effective work, mutual understanding and coherence are simply necessary.
Do you have questions, ask them in the comments. You can get acquainted with the CitySites franchise on the main page.