Take a look at any franchise directory on the web and you’ll quickly discover there’s no shortage of opportunities – with hundreds of franchise systems operating in virtually every industry across Australia. So how do you make a smart choice when finding the right franchise business for your needs? The discovery process begins with asking the right questions.
1. Can I achieve my goals with a franchise?
Are you looking for a change of pace, to redirect your skills and experience into your own business, or to make generous income with a lifestyle to suit? Understanding why you want to run a franchise is a vital step to choosing a franchise that works for your career and personal goals.
2. How crowded is the industry I’m interested in?
To avoid too much competition you’ll want to discount industries that are too crowded, but also those with very few franchises, which indicates that the industry or niche market hasn’t developed sufficiently or doesn’t lend itself to franchising. Banks and other lenders are also much more likely to fund a franchise in a proven market.
3. What is the consumer demand for the franchise product or service?
Is there strong demand and is this expected to continue and grow in the future? You need to feel confident that the franchise offers a quality and competitive product or service and that you have the skills and access to training to market your business successfully.
4. Can I fund the franchise without stretching my resources too far?
You’ll need enough money to not only open your franchise but run it until it starts making a profit. One of the major causes of business failure is inadequate capital, so make sure you have a thorough understanding of all the figures – from entry and start-up costs to day-to-day business running expenses.
5. Who do I need to talk to?
Once you’ve identified a potential franchise, it’s time to start talking to the right people. Have a conversation with as many existing franchisees in the business as you can. You’ll want to talk to the highest performers and the lowest. Make sure you talk to an accountant to ensure you really understand the figures.