1. Resilient Business Model
The franchisor does not have to have been in the marketplace for a long time but you want to see some sort of successful track record. You want to feel confident about buying a particular franchise because the franchisor has been around for a few years and because they sell a product or service there is a demand for.
2. Training and Support
A good franchise brand will consider product and service training paramount and offer franchisees induction training and ongoing refresher courses. A good franchise brand will provide ongoing support, working with the managers to make sure their business is a success.
3. Brand Awareness
An established brand should be well-recognised in the industry, while an emerging one should have a clear strategy for increasing brand awareness. As a franchisee you will be contributing to a group marketing fund and it should be made clear how those funds are going to be allocated, as well as how franchisees are expected to market to and engage with their local communities.
You are providing a certain percentage of your earnings, so you want to be giving them to a franchisor who is going to be making intelligent decisions. Is the Franchisor spending franchisees’ money in a way you as a franchisee would approve of? Are they building a strong brand that is going to drive customers to the individual franchisee’s businesses?.
4. Franchisor you Respect
Trust is central to the franchisee-franchisor relationship. There will always be instances of franchisors doing things that may not seem beneficial to franchisees, but you need to trust that the franchisor knows what it is doing, that they have the resources to do the appropriate market research and forecasting.
If you select a franchisor that shares your values you are less likely to have clashes down the track. Are you going to be comfortable working with the people you will be dealing with? Do they have similar standards of integrity to yours?
5. Happy Franchisees
If you are going to make a commitment to a franchise business, you want to make sure it is a smart investment from a financial and lifestyle perspective. A franchisor should encourage you to speak to their franchisees and you should take that opportunity to understand what your day-to-day life will look like if you proceed and how that fits with your expectations.
Make sure to do your research and walk away if your criteria are not being met. There are plenty of franchises out there for the choosing!
For more advice on purchasing a franchise and other legal matters please contact Mirella Angelino, BDO & Senior Associate Lawyer, Pace Lawyers on 8410 9294 or send us an email via this form.