Never Buy A Franchise Before Asking These 5 Crucial Questions
Many people want
to start their own business, but either doesn`t have a startup business idea or
lack the entrepreneurial vision. A franchise business in India is one of the most feasible options
for those who don`t want to start a business from the scratch.
Purchasing and
operating a franchise is easy and is similar to coloring inside of the lines.
Brands that are well established and have a strong presence already have a
niche market. So, if you don`t have a problem selling burgers that are made by
someone else, a franchise business may be just the ticket for you.
But the universe
of a franchise is broad and diverse. It has arguably more than thousands of
options, which is both good and bad news. So many choices often result in
confusion and lots of intimidation.
Though franchise
business in India offers a new yet practiced way of doing business,
there are multiple things you should clear before choosing any franchise
business.
Every year, a
lot of entrepreneurs enter into a franchise business for the first time. But
very few achieve success. So how will you decide which franchise is good for
you?
Here are 5
questions that you must ask before investing your money in a franchise:
1.
How much do I invest before entertaining customers
You may find the
initial charges and investment-related information on the company website or
franchise brochure, but you might incur various other costs afterward. Hence,
you should ask about the initial investment in details apart from the basic
information. Ask them about real estate, equipment, leases, etc.
Always ensure
that you discuss these terms in detail with the franchisor so that you have a
clear picture of your investment and your financial requirements to get up and
running.
2.
What changes did they make to support their franchises through
COVID-19?
Two years ago,
asking this question wouldn`t have come even in the existence. But now we are
living in a changing world. Thus, you need to ask them how they supported their
franchises throughout COVID-19. Knowing how things went in the worst of times
will give you clear insights into how things might go in the best of times or
amidst any other crisis.
Many good
franchisors went out of their way to support their franchises. Some even waived
off their fees and helped them obtain paycheck-protection-program funding along
with making them updated with new technology.
3.
What sets your brand apart from its competition?
Competition is a
part of any business. However, it is important to understand what makes one
brand different from the rest. For instance, if you are thinking about buying a
fitness franchise, you will want to understand what sets this brand apart from
the crowd and what concept do they have as a brand. As it is your money that
you want to invest, think twice before you invest. Make it a point that you
understand the business model and value proposition of franchise businesses in India.
4.
What is your failure rate? How many franchises have closed and why?
Even the most
popular franchise brands have their franchisees closed due to one reason or
another. In some cases, it’s the franchisee`s fault as they did not have the
required skill set or could not adhere to the system. But in many cases, it’s the
franchisor`s fault. It could be insufficient training or an inefficient
business model.
As no one wants
to invest in a bad business model this is why it is important to examine a
brand`s failures no matter who was at fault.
5.
Are there any Financial Incentives or Deals?
Franchisees often hesitate to talk about
monetary incentives or deals. Many franchisors offer discounts on the franchise
fee. They also offer to waive off the royalty fee for a few months to help the
business take off. So before you decide
to invest in a franchise business in India, ask your franchisor whether they assist
you in lease negotiations, site selection, etc.? What support staff will be
accessible to you and in what other ways they will assist you beyond providing
initial training?
Franchise
business in India often comes with less risk than starting a business from
scratch and offers a path that can lead to success and profitability. However,
it is important to ask the above-mentioned questions and many other things to
ensure that you are putting your money in the right direction.
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