Today I will tell you how to start a profitable business and answer the question of why business people are increasingly choosing to franchise their businesses.
Study the market
Before opening, you should know:
- Who is your competitor;
- Who is your target audience;
- Features of demand in a particular location.
Navigator will help you identify your competitors, and nearby large residential properties will identify your target audience: offices, universities, schools, fitness clubs, and shopping malls, and Google Trends will tell you about the specifics of demand.
Identify a project with a suitable direction and amount of investment for you.
The franchising market is vast, and finding a worthwhile offer is complex. And if it is easy to decide on finances, then when choosing a business area, be guided by the experience already gained and interest in the direction. It is logical that a person with expertise in the field of catering, for example, as a cook, will find it easier to understand many processes.
Generally, This does not mean that the lawyer will not cope. In Most Cases, This means that it will be easy for a lawyer to establish a document flow, but more time to study the issues of cooking, technological maps, etc. It is essential to be prepared to explore these aspects if there is no experience in any of the areas necessary for doing business.
Research companies that offer franchising services. Having decided on the volume of investments and the scope of business, start studying the offers of franchisors.
- Compare the proposed conditions and the cost of cooperation. The franchisor must transparently justify the amount of the lump-sum fee, royalties, and marketing fee, if any. Remember that the absence of royalties signals the quality of further support for your business, but “expensive” is not always the same as “good. That is why it is essential to responsibly approach the analysis of the services provided by the company.
- Request all the documents necessary to assess the integrity of the franchisor: a commercial concession agreement, a presentation, a financial model, and reporting on the profitability of his enterprises. The more complete the company’s picture is, the higher the chances you are on the right track.
- Make sure that the business offering its services to you is accurate. You can check this fact on Google or, if the company is near you, go to the establishment in person.
- Find out about the number of franchised businesses.
- Having at least 5 franchisees can guarantee that the company has experience in running not only its own business but also the business of partners. Turning to franchises without the relevant experience can hurt your profitability.
- Read the reviews of existing partners. You can read reviews on public resources, ask for franchisee phone numbers, or find them yourself.
- Study reviews of the franchisor’s establishments. Remember that there will be pros and cons, and that’s okay. The ideal business does not exist. But there is your right to choose the network in which you like the brand’s visual presentation, the concept of the menu, the terms of cooperation, and the broadcast values.
Become a full partner
A business’s success and profitability depend not only on the right choice of a franchisor but also on your willingness to participate in the process. Moreover, a good business must stand on building a system at the enterprise.
The company will make a lot of efforts to make your establishment attractive to guests in terms of visual perception, service, and cooking quality. But managing this system and maintaining it functional is your task. Franchising should not be confused with an investment project where your mission is only to invest finances.
For example, to save you time and money:
- Will make for you an individual technical and interior design of the premises;
- Will send its best employee to the opening of your institution for staff training;
- Provide you with a menu developed by the best Chef in the UK, the winner of the All-European Culinary Championship among Chefs;
- Will provide your business with a low % of acquiring services;
- Will provide the opportunity to pay a fixed royalty;
- It will help you get a deep discount on Pepsi products.
And to attract guests to your establishment:
- Will allow you to cooperate with the most significant donor organization in Russia;
- Will independently pay for advertising and bring hundreds of guests to the opening of your institution;
- He will manage your Instagram, create attention-grabbing, trendy content, and advertise your establishment on social media sites.
Now you know more about how to choose a company to cooperate with, interact with franchisors, identify if there is a demand for a product, and keep guests interested in your enterprise.
As for the increased demand of the business community to work with franchise networks, the answer lies on the surface. When choosing an experienced franchisor, doing business becomes 2, 3, or more times a profitable event.
Thanks to this, you have a high chance of a successful business with up to 30% profitability.