5 Ways to Filter the Best Franchise Opportunity in 2020
By Priya Shetty
Two years ago, Srikant was a software engineer in a reputed multinational company. Srikant was not happy sitting at his desk and working for long hours day after day. He longed for a career change. He did a bold move. He quit his job. Soon he met Vishnu, an old classmate. Vishnu was thriving as a franchise owner of a Korean based International Lifestyle store. After three months of research, Srikant narrowed down on a franchise opportunity for himself. Srikant is now a franchise Business consultant and has a nice small office of his own.
Franchising is perhaps the best way to expand for any company. This way they get to expand their presence across different locations. The franchisees find it is one of the best ways to plunge into the entrepreneurial journey, of being their own boss.
You might be one of the many aspiring entrepreneurs who are considering buying a franchise business. But the most important question is that among an ocean of franchise business opportunities out there, how do you decide the best business opportunity that suits all of your requirements along with providing good prospects for the future ?
Well, there is no simple answer to this. Choosing the best franchise opportuntiy for yourself can sometimes require going through tons of options from numeros prospering industries only to be left wondering which one suits YOU the most.
As much important as it is to evaluate various options, it is also very crucial that you know how to filter them correcty to make sure you're moving in the right direction as you begin your entrepreneurial jounrney into the mighty world of franchising.
We have narrowed it down to five simple criteria that will help you find the best franchise opportunities most suitable for you to start a new business in India in 2020.
Where does Your Interest lies: Get to know yourself
The first step while choosing a franchise business is to get introspective about what you are trying to accomplish by getting into this business. You need to ask a set of questions to yourself.
What do you want out of this business?
How much money do you have to invest?
What is your exit strategy?
How much risk are you willing to take?
How involved can you be?
What are you good at?
We recommend you start with establishing your own criteria for a franchise. It is essential to understand your interests and choose a franchise opportunity that you feel closely aligned with.
Decide a Criterion for Selecting Franchises
After deciding your franchise business idea, it is time to create your own criterion for choosing an opportunity. Deciding a criterion means you must create a list of ideal characteristics for your franchise. We know that your ultimate goal should be to generate as much profit as possible, you must create a list that you think is important for your journey
The criterion could include following steps:
The business type
Size of Business
Level of support
At this stage it is helpful if you look at specific types of businesses and not particular brands. Be logical and not emotional. Do not decide only based on what you think is fun . Does it meet your goals, skillsets and risk tolerance?
Once you have done this checklist, it is recommended that you set a specific deadline. Usually if you do not have an end date, you could end up never making a decision
Shortlist the Brands
Now you have a clear idea, you have made a criterion and are aware of what you are looking for, then comes the time for some actual action. Now you should prepare a list of brands that fit your criterion. At this stage, research further about each shortlisted brand.
Each franchisor will have a Franchise Disclosure Document. At this stage, you must now gather some crucial details about the brands.
You must take details regarding the industry, the financial data, the risk levels, the support provided. Also take details regarding the expected ROI, expected breakeven, functional area required, franchisee fee. Do all the ground research at this stage or hire a franchise consultant who could do this for you.
Once you have shortlisted the brands, do a comparative analysis of all the brands .
Use Resources to Understand the Brands
You have now done some extensive in depth background research on the shortlisted brands.
Now go a step further by conducting primary research. You must speak directly to the franchisor and also with other existing franchisees. Speak to a franchise consultant who is closely associated with these brands.
Compare and Refine
Once you have done your complete research based on all these criterions and first-hand information, it is time to compare and refine the brands to find the best suited opportunity for you.
Review everything in one place and narrow down to an opportunity that is best for you.
You could also hire an expert franchise consultant for this process.
We would love to hear from you. Is there any more details you would like to add? Please leave your comments below
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