Franchising is an opportunity zone for modern-day entrepreneurs. With little but careful measures, one can reap a substantial bottom line. Franchising is a good thing because it allows individuals to own a small business but have a network of support. The only disadvantage is that having too many options makes it difficult to select the best franchise. Sometimes, it can get confusing. Here we break down some of the basic franchisee expectations.
What to Expect from Your Franchisor
Each prospective franchisee has specific expectations of their prospective franchisor. For the standard ones, the below franchisee expectations are non-negotiable. As a potential franchise buyer, you should make sure any franchise partner has these.
Basic Franchisee Expectations: Franchisors should be Professional.
It would be wise to look for a franchise that operates its business professionally and can present the following in a professional manner;
1. Company Website
2. Registered Company Address
3. Advertising & Marketing Support
4. Franchisee Meet-ups
5. Past Performance Record
6. Projected Growth & Support
8. Legal Disclosures
Basic Franchisee Expectations: Upfront Cost Disclosure
In addition, to support, there should be financial transparency regarding the costs to start a business and sustain it. When you visit a business’s website to inquire about pricing and interact with representatives, they should be proactive in providing you with all the required information.
Since you will be investing a significant sum of money to buy a franchise, you need to be confident about the organization. There should be no hidden costs that will surface later. It’s a good idea to contact existing franchisees and inquire about their upfront costs. This should give you a good idea of the company’s financial viability.
Franchise Territory Protection
This is critical; you don’t want to open the franchise business you’ve always desired only to discover that someone else has opened a similar franchise less than a mile away. Furthermore, this is certain to have a detrimental effect on your profitability. Therefore, determine whether the franchise offers territory protection.
Equally as important, is the scope of business support. It is frequently referred to whenever a franchise business model is discussed. So, as a franchise buyer, you should expect your franchisor to offer business support. The following are the areas in which the company’s headquarters should assist:
Franchise Site Selection
Each franchisor operates under a unique business model, and the one with which you intend to affiliate may or may not have a department dedicated to real estate. If they do, that is fantastic; if not, they should at the very least be able to provide you with references for commercial real estate agents in your specific area.
Likewise, a portion of the fee you pay the franchisor is for their expertise in the demographics, which should play a large part in the real estate process. The franchise team should be able to assist you in identifying a location that will be profitable for you.
Apart from interviewing the franchisor, you can gather information from current franchisees. You should discuss their unique experience and if there were any red flags. It’s natural to have these questions about the franchisor, and you should speak with current franchisees to determine whether your prospective franchisor delivered as per the franchise contract.