Six -ITY Factors to Choosing a Franchise

Likeabil-ity

First, you must feel some attraction to the category and the brand. Ask yourself the simple question, based on your initial gut reaction, “do you like the brand; do you like the industry?” Buying into a franchise is a COMMITMENT. You must like what you are doing. If not, don’t choose the franchise or the industry.

Simplic-ity

If the franchise concept is complex and not very simple to understand, think about how confusing it could be to your potential customers. Lead generation and customer conversion are critical to the success of every franchise system. If it is not simple to understand what makes the franchise different or special, it will be difficult to grow the franchise.

Versatil-ity

Being simple to understand is very important however being over simple can create issues. You’ve heard the expression “one trick pony.” Franchise systems that offer one revenue stream limits growth. Also, franchise systems that are rigid in its policies and structure cannot react quickly to local competitive pressures thereby hindering individual operator opportunity for success.

Scalabil-ity

In franchising there is an expression that says, “When you buy one unit, you buy yourself a job. When you buy multiple units, you buy yourself an investment.” Many franchise systems require very large amounts of capital investment to open one unit let alone several units. Also, you must look at whether the franchisor’s operations and marketing systems are easily and readily expandable. You should ask yourself if you are looking for a job or a longer-term growth investment.

Longev-ity

Franchise concept longevity can be an important factor to consider when choosing a franchise, as it can indicate the potential for long-term success and stability within the franchise system. Forbes notes that longevity should always be considered in relation to your goals for the business. It is also important to consider other factors such as the simplicity of the franchise concept, the support and training provided by the franchisor, and the financial requirements and potential returns of the franchise. Ultimately, the importance of franchise concept longevity will depend on an individual's specific goals and priorities when it comes to owning a franchise.

Profitabil-ity

Profitability is critical to franchise viability because it is what ultimately allows a franchisee to sustain their business over the long term. A franchise that is not profitable will struggle to cover its operating expenses, pay its employees, ongoing royalties and Advertising fees, local marketing and generate the returns needed to justify the investment. Also, without profitability, franchisees will be limited in their ability to grow and expand their business.