By Armando “BUTZ” Bartolome
More people have started to realize the need to create another source of income to get by with their everyday needs. And for some, the simplest way to start a business is through franchising. Franchise businesses back then were mostly about food. But today, there are various franchise businesses that you can choose from – salon, laundromat, drugstore, printing, and tutorial schools, just to name a few. So now, that leaves you with the question – which franchising business is for you?
My book, “Is Franchising For You”, that was published in 2011 is a concise and detailed guide to franchising a business in the Philippines. Franchising, being an ideal alternative to become an entrepreneur has various paths that can lead to the make or break of the business. Thus, as I always say, to become an entrepreneur, above anything else, one must have the right mindset in order to have focus on the business. The book aims to provide the necessary information needed by aspiring entrepreneurs and to be able to avoid being scammed by other people whose intention is to merely squeeze you out financially.
What To Look For In A Franchise Business
Franchising is often referred now as the “wave of the future”. It has encouraged more people to look into this kind of business, simply because everything has already been rolled out by the franchisor, which makes it easier for the franchisees to get things started.
However, not all franchises appear to be how they present themselves. And with that, you need a careful investigation to be able to identify which is the right one for you. While you may be very well aware of many successful franchises, keep in mind that buying a franchise is no guarantee of success. Just like opening up any kind of business, there are risks involved. Each year there are failures, both on the part of franchisors and franchisees.
To franchise a business is more than having the right to use a business name. It also denotes that franchisees are able to benefit from the franchisor’s experience as well as the business formula for success. Therefore, to simply hand out your money and sign pages of paper is not everything that there is.
Being a franchisee, it saves you the time and money by joining up with someone who’s taken all the hard knocks. When you buy a franchise, you are buying a successful business format: a standard location, design, equipment system, and operating procedure that ensure a certain degree of success for each franchise. A franchise owner has to tell what works for this business and why, what type of location is best, and what type of lease terms work and why. She has to have a good advertising scheme and a recognized name and trademark that a franchisee can rely on to bring in business. Most importantly, the franchisor provides an operating manual that covers how to operate the business on a day-to-day basis.
- Find a unique brand and concept which you think that is possible for you to pursue. Choose a brand/product that you firmly believe in. It makes it easier to sell these products when you know for yourself that they actually work or effective.
- Choose a franchise business that is financially profitable and stable. But of course, you also must look into account your financial means. A certain food chain may have a franchising cost of about Php15M which you think is a great idea to put up, but if you have limited resources, this may not be the one for you. To loan from a bank can be an option. However, make sure that you choose a strategic location to ensure that you can get your return on investment in a minimal amount of time.
- Never fail to look into the franchising program of the business. You may seek advice from your lawyer regarding the contract or agreement. Similarly, check out the business plan, marketing. and sales strategies. Make sure that you are aware of how the business operated before jumping into a commitment.
- It is quite common that franchisors charge their franchisees for marketing fees every month. Understand where these fees go and how the franchisors use it in building the brand. You wouldn’t want to get stuck with just a single product for so many years. You would want something new to offer to the public to make them patronize your business.
- Be aware of what kind of support does the franchisor provide and how you, on your end, can be effective in adding effective strategies on how to sell your products/services. Most often, franchisors who do not provide that much support leaves the franchisees at lost. Not being able to make drastic decisions as it may cause problems with the contract that they have signed. Therefore, ensure that you choose a franchise business that you know has the very good reputation.
It is essential that aspiring entrepreneurs should have a good business knowledge as well as people skills. Indeed, you can learn so many things as you start your business. However, one must start with enough knowledge on how to run the business.
If you don’t mind higher costs and less control in exchange for expert backing and support, franchising may be for you. Thinking of how it may be very convenient that everything is handed down to you and all you have to do is to continue what has been started, then you may start buying your own franchise business. If you prefer, however, to have full control of the business, then opening your own should be the right one for you.
