When you say the word ‘Franchise’, most people immediately think of business-based franchises like those that are top listed in popular business magazines every year. But, it is important to remember that there are hundreds and thousands of franchises out there, some that are spectacularly successful, others that are total failures. Obviously, you want to avoid the latter. So, how do you select the best franchise opportunities that work?
The first step is to understand that franchising is not everybody’s cup of tea. A franchise is someone who works under an established company, selling pre-established products in a particular manner. For some, this sort of an operation may cramp their style. Remember the customer’s loyalty is to the brand name and not to the franchisee. So, you have to play by the rules of the franchisor. For example, you cannot sell burgers in a Pizza Hut outlet. But for those with limited experience in the business sector and those who love to work within the framework of an established system, the right franchise opportunities offer the path of least resistance and maximum return.
So, what is franchising? Simply put, it is a system of distributing services or products, and it typically involves two levels of people. In the first level, you have the franchisor under whose name or trademark the business will be held. In the second level is the franchisee, who pays a royalty to get the right to do business under the chosen franchisor.
Lucrative and the best franchise opportunities are easy to identify if you know what to look for. The first thing is to select a brand name that sells. Belonging to a reputed brand gives you a competitive edge. Often, the franchisor’s name is in itself the biggest advertisement you want. Think MacDonald’s! Their name is sure to draw enough business due to their consistent delivery of high quality products and their global advertising campaigns.
One of the biggest challenges when it comes to choosing the right franchise opportunities is the sheer choice you need to confront. Did you know that more than 48% of all retail sales are franchises? To make matters worse, there are about a 100 different industries to choose from. So, what should you do? Easy. Go into yourself and think for a moment: what do you like? Do you have any hobbies that could help you? Find the industry that ignites the spark within you. Remember, once you start, you will need to think of your business 24/7.
Once you identify the industry you want to work in, the next step is relatively easy. Find the franchisor you want to work with. Online web directories are a good source of franchise information. You could simply log on to web portals and enter your search criteria based on geographic location, industry and price. You will then get a complete listing of franchise opportunities in your area of choice.
You’re not ready to sign the agreement just yet. Remember, you have to negotiate terms with your franchisor. To do this, you would need to draw up a business plan. Many franchisers owning franchise in the Philippines are willing to alter their terms somewhat if you can show them how it will help them and you, the franchisee, to grow.