Investing in a franchise business is a huge decision that shouldn’t be entered lightly. Despite the seemingly straightforwardness of conducting business under a well-known brand and with proven business model, it, like any like any business, requires a lot of hard work and attention.
There are also a number of pitfalls that may not be obvious for first-time franchisees, so we have compiled a short list of what they are and how to work around them.
Conduct Comprehensive Market Research
One frequent error is choosing to venture into an unfamiliar business territory. Therefore, it is best to invest in a franchise business within your field of expertise or dedicate time to investigate your local market thoroughly. This research should encompass competitors, local pricing structures, and related factors. It's also crucial to seriously evaluate whether there's a demand for the business in your preferred location.
Anticipate Future Trends
Opting to invest in a franchise from a well-established, conventional market may seem like the sound and secure decision to make but it's essential to look ahead and consider emerging trends over the next 3-5 years, if not longer. In recent years we have witnessed a notable shift towards digital spaces and innovative production methods – especially accelerated by the Covid-19 pandemic. In this context, industries with promising prospects for growth and expansion include logistics, delivery services, and 3D printing. These emerging trends often cater to niche markets, constituting a small percentage of the total buyer share, but they hold significant appeal for entrepreneurs due to the exponential demand that outpaces supply.
Recognize the Significance of Marketing
When you become a franchisee, it's essential you don’t assume that the franchisor will automatically bring customers to your doorstep. Attracting clients is a responsibility that falls squarely on your shoulders. It goes without saying that customer attraction is the lifeblood of any business so make sure to ask your prospective franchisor about their marketing supports and strategy.
Consider the Franchisor's Values
A brand's strength extends beyond its name and logo; it encompasses a company's vision, mission, and core values, which articulate the company's beliefs and actions. As you sift through your options, it's crucial to ensure that the franchise your are leaning toward has values and philosophy that are firmly established, and, crucially, align with your own values. When you are passionate about your endeavours, you'll find the resilience to overcome the challenges that lie ahead.
Prepare for Hard Work
While investing in a franchise comes with many advantages that opening an independent business simply doesn’t have - a proven business model, brand recognition, training, ongoing support, established customer base, reduced risk, and growth opportunities in a franchisor's network – it also requires hard work.
Operating a franchise demands deep involvement in every facet of business management, necessitating a comprehensive understanding of its internal workings. Starting a business entails substantial initial efforts, and honest franchisors will communicate this upfront. In short, running your own franchise, like any other business, will require a lot of hard work and dedication. However, a franchise business can deliver freedom, flexibility, and financial independence, like no other.
To find your perfect franchise, take a look at the wide range of opportunities in our Franchise A-Z.