Choosing a new franchise brand to invest in can be very
difficult if you aren't sure how to properly compare
opportunities from vastly different industries. Look for some of
these eight characteristics and features to determine if your
favorite concept will actually turn into a profitable
1. Examine the brand history. What kinds of lawsuits have been
brought against them, if any? Check for constant changes in upper
level management to indicate an issue with the underlying
2. Determine how much assistance and training is available
from the brand. Do they simply leave their newest members on
their own to figure out the important concepts and tasks? Bigger
training packages indicate brands that have a more developed
3. Attend any meetings of franchise owners or trainers to
determine what kind of culture is offered by the company. You
will also get a chance to ask questions that might otherwise be
difficult to answer.
4. Compare the amount of national level marketing offered by
the parent company. You won't have to spend as much on television
advertising or billboards if your brand is already popular due to
the actions of the company.
5. Consider how long you actually want to be involved in the
business and what you plan to do with it in five or ten years.
Many investors prefer to sell off successful franchise locations
once they build them up, while others want something they can
6. Read through the Franchise Disclosure Document and check
for unusual clauses or regulations. Companies that have strict
regulations on how you can change your business over time may
make it hard to become successful if there are flaws in the
overall business system.
7. Check the limitations on termination. If you are hit by a
sudden injury or financial problem, you will need to be able to
liquidate your companies without facing stiff fees for changing
ownership in the middle of a contract with the franchiser.
8. Talk with real operators in your area or region. Don't just
listen to the owners that show up to open house days with the
management company. Call up managers and discuss the challenges
of owning a company in the brand.
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