a successful franchise is a dream for many aspiring entrepreneurs. But buying a
franchise isn’t just buying a ready-made business where you add an owner and
everything else falls into place.
Buying a successful franchise is a dream for many aspiring entrepreneurs. But buying a franchise isn’t just buying a ready-made business where you add an owner and everything else falls into place.
There are many variables to consider, options to choose from, and decisions that need to be made to ensure your franchise is a success. So, are you ready to take the plunge?
Here are a few questions you need to ask yourself before taking the massive decision to purchase a franchise:
1. Do You have enough funding?
Buying a franchise means having enough funding available to firstly make the purchase, and secondly to ensure that you can carry all running costs until you reach profitability – for at least a year. Franchises have many strict rules around their brand, like only using certain products and suppliers, and they also enforce strict uniformity in shop layouts, décor, and staff. You must be able to carry costs and ensure that you meet the franchise expectations. Running out of money mid-project will see you lose out rather than gain anything.
2. Have you done your research?
Proper research and due diligence are of the utmost importance when deciding to buy into a franchise. You need to make sure you agree with the company values and that you feel a connection to the brand. Buying a franchise blindly without knowing the exact details of running that specific one, costs and limitations is a recipe for disaster. Make sure you know the brand and everything it offers before you sign on the dotted line.
3. Are you ready to follow the rules?
Franchises have strict rules that all franchisees must adhere to. Many time franchises will determine where the franchisee will have to purchase supplies or products, operating hours, staff requirements and much more. You must understand that the franchise is a part of a much larger brand, and as a franchisee you need to adhere to the brand values and practices. Keeping and maintaining the brand’s reputation is the most important aspect of a franchise. So, you need to be ready to follow the rules and regulations set out by the franchise, even though you might have your own ideas.
4. Do you have a location?
One of the most important aspects to owning a franchise is having the right location. While the franchise can help you with determining which location best suits the business, ensure that you have found a few possibilities that work for you and the business. Speak to property experts like Ithala Development Finance Corporation about your business needs and the requirements before making your final decision. A good location will help make your franchise a success.
5. Will you have support?
Support from the franchise for the franchisee is super important if you want your business to work. Do some research on the franchise by speaking to other franchisees and determine if they provide enough support for owners. Having solid support from the franchise head office can mean the difference between being successful or a hard failure. Also use the opportunity to discuss other things like any struggles, pros, cons, and unforeseen or hidden costs. Getting to know how things really work from someone with first-hand experience means you’ll go into the business with your eyes wide open.
If you’re ready to take the plunge or are interested in learning more about owning a franchise, then make your way to the 21st International Franchise and Entrepreneur EXPO being held in Durban for the first time this year.
Happening on the 8th and 9th of March at the Durban Exhibition Centre, the event will bring together franchisors, potential franchise buyers, potential franchise suppliers, and businesses looking to franchise and find business opportunities.
Experts in franchising and related fields will provide free talks on matters crucial to buying and owning a franchise. Topics include how to evaluate a franchise business, what is the best way to fund a franchise, and how to turn your business into a franchise.
Seats are limited, so make sure you secure your place now. To register, visit www.ife.co.za.
Tickets are available online at R50 per person per day or R100 at the door. Children under the age of 16 get free entry.
For more tips and inspirational stories visit the Ithala blog at www.myithalastory.com.