Investing in a franchise is an exciting opportunity and offers the most straightforward pathway to business ownership. Entering into a franchise agreement is a big decision for sure and it is not one that should be entered into lightly. Prospective franchisees should take time to studiously examine all the facets of their chosen franchise before making that final decision.
Franchising is growing throughout the world and regions the Middle East and North Africa (MENA) is no different, as more and more people are embracing franchising as a viable way of starting a business. According to The Middle East & North Africa Franchise Association (MENAFA), the MENA franchising sector is worth $30 billion and is growing at a pace.
When considering investing in a franchise in MENA, there are some keys areas to keep in mind. Below is a list of ten things to think about before buying a franchise in MENA:
Franchise Costs:
Be sure to know the total investment required to purchase the franchise. Typically, but not always, think of initial franchise fees, equipment costs, real estate expenses, and ongoing royalty or advertising fees. Take time to be sure the financial demand from the franchisor aligns with your budget and financial goals.
Franchise Success Rate:
Be sure to do some background research on your preferred franchise's track record and success rate. Look at the financial statements, earnings claims, and try to speak with existing franchisees to try to determine their satisfaction and profitability.
Franchise Support:
Make yourself aware of the level of support granted by the franchisor - including training programs, marketing assistance, operational guidance, and ongoing support – meets with your own needs and expectations. Most franchisors provide thorough support systems to assist franchisees in their bid for success but if there is an area not mentioned, don’t be afraid to ask the franchisor about it.
Market Analysis:
Conduct thorough market analysis to scope out the demand and competition for your chosen franchise to determine whether it will be a good fit to the area within the MENA region you are considering investing. Take into account local demographics, preferences, and economic conditions to determine the potential success of the franchise.
Territory and Location:
It is imperative that you discover whether your preferred franchise offers exclusive territory rights or if you'll be in competition with other franchisees from the same business. Also very important is the scouting of potential locations to evaluate them on the basis of foot traffic, accessibility, and demographics.
Franchisee Requirements:
Take the time to understand what qualifications, skills, and experience is desired by the franchisor. And make sure you have the aforementioned attributes, so you meet the desired criteria and meet the franchisor's expectations.
Franchise Agreement:
Review the franchise agreement carefully, paying particular attention to the terms and conditions, restrictions, and obligations. It may be helpful to seek legal assistance to ensure you understand the agreement fully.
Brand Reputation:
Take the time to research of the franchisor's reputation and brand recognition in the MENA market. It is worth remembering that an already well-established and respected brand can offer a huge competitive advantage and providing you with a head start in attracting customers and clients.
Exit Strategy:
This is one area that is often forgotten amid the excitement and eagerness to own your own franchise business but remember to carefully examine the franchisor's policies regarding selling or exiting the franchise in the future. Understand the terms and conditions for transferring ownership or selling the franchise and evaluate if they align with your long-term goals.
Franchise Regulations:
Familiarize yourself with the regulations and laws governing franchising in your chosen market within the MENA region. Be aware of the obligations and rights of both franchisors.
Remember, a franchise is a significant investment, and thorough due diligence is extremely important. Take the time to research, pour over information, and consult with professionals before making a final decision so you are sure that it is the right one for you!
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