Making the Right Decision

While there are many franchise opportunities for sale there are as many questions you might like to consider before making any important decisions. There are questions you can ask yourself as well as questions more specific to finding the right business.

Firstly, you need to consider whether you are suited to franchising. While you may possess the drive and enthusiasm required you also need to be prepared to work within the framework of the franchise. Some franchisees find that following methods and procedures for running the business, provided by the franchisors, irritating and too restrictive. Therefore, assess whether you can handle it.

It is also important to consider your interests, goals and aspirations, as well as the level of personal and financial commitment you are prepared to make. Are you prepared to cope with the reality of operating your own business, including the hours, stresses and the risks?

Deciding on the right franchise business also requires a number of considerations. The key to choosing well is RESEARCH. Evaluating many opportunities before narrowing your choice is a good strategy as any decision carries long term consequences. Your personal tastes and financial circumstances may assist this process as different franchises involve different products and services and carry a variety of price tags. Evaluating specific opportunities is a difficult and complex process. This is because it is important to consider the products, services and prospects of not just one business, but two: the franchise opportunity as well as the franchisor.

Pertaining to a particular opportunity, consider the business you are looking at and the wider industry it is operating in. For example, what products and services does the opportunity offer to customers? Who are the competitors and what do they offer? How is the brand perceived? Is the concept proven? Is there enough demand in your location for the franchise businesses as well as profit margins to support you over the long-term? Is the franchisor a member of the Franchise Association? If not, why not?

Evaluating the franchise package is also of paramount importance as franchisors vary in the extent and level of supporting services and structures they provide. Assistance may cover numerous areas and depending on the type of franchise could include assistance with site selection, design of physical layout, training programs, provision of standard operating manuals, field operation evaluation, ongoing advice, information bulletins, regional and national meetings, book-keeping, centralised purchasing and inventory control, marketing research, and advertising and promotion. Comparing more than one franchise gives you the opportunity to evaluate whether you are getting value for your money.

One factor that can not be stressed enough is the importance of obtaining specialist professional advice. Seek advice from accountants and lawyers who specialise and/or are intimately familiar with franchising. Franchising is a complex relationship so choosing well can result in better advice at lower cost. Experienced accounting advisors can in view of your personal circumstances assist you in determining the prospects of the franchise opportunity. Franchisors will often provide performance information based on existing franchises or company-owned operations. Obtaining specialist legal advice is sensible for understanding the terms and conditions of the franchise agreement and assessing its fairness.

Make the right decision and choose wisely! It is one of the most important decisions you could ever make!

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