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How To Evaluate A Franchise Opportunitiy

Assessing a franchisor

While the franchisor will have plenty of opportunity to assess your suitability, it is just as important for you to have confidence in the franchisor, after all, the strengths of the business you are buying rest almost entirely with them. Don't be afraid to ask all the appropriate questions about the business, structure of the organisation, and its future potential.

Here are some of the points you should raise with the franchisor….

• Is the franchisor financially sound? Is their industry performance strong in comparison with competitors? Historically, have they always been a stable organisation? Are they the market leader?
• What did they do previously and why did they go into franchising ? This gives you an indication of what they are about: It gives you an insight into the background to the franchise.
• Does a comprehensive operations manual support the training? This manual is a crucial tool for all franchisees - it should give you as the franchisee, a full run down of what to do should any difficult situations arise. It is your guide for running your business, and should complement the training you undertake.
• Has the franchisor run outlets in similar areas to yours? Geographically how many franchisees does your franchisor have? Are they well established and have vast experience of running franchisees throughout the UK , or is the franchisor new to franchising with limited knowledge of certain areas?
• How successful is the franchisor and existing franchisees? Going back to the performance of the franchise, how are the franchisees and the company as a whole performing? How many franchisees have gone out of business in the network?
• How thorough is the training at the start up stage and thereafter? You will find the answer to this question by going out and meeting the existing franchisees face-to-face, and getting a feel for the organisation.
• How many franchises have they opened in the last 12 months? Relating to the performance – is the franchisor just looking to recruit franchisees and acquire fees, but not providing the necessary training and support once set up?
• How many applicants do they reject? How stringent is your franchisor with recruitment – are they maintaining high standards for their business?

Make a point of talking face-to-face with current franchisees. This will allow you to see the work involved and what would be required from you.

For further information and guidance on Assessing a Franchise , click here.

How many to apply to

Through your personal analysis and evaluations of the market place, you should now have an idea of what development type , franchise type and industry sector you are focusing on.

Once you've decided upon the industry sector, you should contact several franchise companies to help you assess their opportunities. Compare one off against the other until you find what appeals and suits you the most.

Be selective: don't go assessing every opportunity out there. At this stage you should aim to keep your due diligence manageable and focused on what franchises really appeal to you .

Franchisor Responsibilties

By attending a franchise seminar, you'll learn exactly what you should expect from a UK franchisor as best practice. This will be over areas such as…

Recruiting the right franchisees – the importance of recruitment for the success of the network.

How the recruitment process works – the different stages that franchisees go through before the launch.

The training package and what it entails – what type and levels of training you can expect from a good ethical franchisor.

The support offered before and after launch – what support structures are in place to assist you as a franchisee.

Marketing and Sales – what marketing initiatives the franchisor does and will do to support and promote the brand.