Franchise Selection : Key Criteria

Franchise Selection

Before buying any franchise business, you must carefully consider many factors that are critical to your success:

Costs

Your abilities

Demand and competition

Brand name

Training and support

Franchisor’s experience

Expansion plans

Costs:

How much money will this franchise cost before it becomes profitable?

Can I afford to buy this franchise?

Can I make enough money to make the investment worth my time and energy?

Your Abilities:

Do you have the technical skills or experience to manage the franchise?

Do you have the business skills to manage the franchise?

Demand:

Is there enough demand in your area for the franchisor’s products or services?

Is the demand year-long or seasonal?

Will the demand grow in the future?

Does the product or service generate repeat business?

Competition:

How much competition do you have, including other franchisees?

Are the competing companies/franchises well established?

Do they offer the same products and services at the same or lower prices?

Is there a speciality or niche you can capture?

Brand Name:

How well known is the franchise name?

Does it have a reputation for quality?

Have any consumers filed complaints against the franchisor?

Training and Support:

What kind and how much training and support does the franchisor provide?

Do existing franchisees find this level of training and support adequate?

Franchisor’s Experience:

Has the franchisor been in business long enough to have established the type of business strength you are seeking? 

Expansion Plans:

Is the franchisor planning to grow at a rate that is sustainable?

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