, India (PressExposure) May 06, 2009 -- It is often perceived that when buying a franchise, you are more likely to be successful if you choose to go for a well established company. This however, is not the case. There is always an element of risk involved regardless of the popularity of the franchise. It is extremely important that you do as much research as possible before investing in any business. You are only able to make profit, once you do the right things, given the right tools.
The reputation of the company is crucial to your decision making process including, the history of the franchisor, the marketing materials they use alongside training, support and realistic predicted financial projections. The franchisor should come from a strong business background, as this way they will have hands on experience of what it takes to run a lucrative business. It is also a good idea to ensure that the franchise has a registered trademark as this will prove that the business model is relatively unique.
You must also take into account, the requirements of the target market and see if the services provided by the franchisor meet these requirements. You should find out how long the franchise has been in operation and what has been achieved since, because this will give you an indication of where the business is heading. The support provided by the franchisor must match up to your own needs as sometimes, the franchisor cannot assist you as closely as expected, this is why you must evaluate the support given to franchisees and see if it is up to standard.
Another important factor when deciding on a franchise is the training involved. It must be adequate and comprehensive as without this, you will not be able to perform in the manner expected by the franchisor. You may also find that you are lacking in sufficient knowledge that equates to a healthy business as there is no real training process, in which case you should consider leaving the company as soon as you can.
The location of your business start up can massively impact the overall success you have. It is beneficial for you to understand if there is actually a gap in the market that your business will fill. In addition to this, you should investigate the competition in your area, so you may want to have a good look around your chosen location. Even if there are franchisees from your own network near to where you are, they are still competitors. Your location should expose you to your target market effectively which is the reason why you should choose the most productive area in relation to your business.
Something you will also need to know is the expected return on investment and if this stands coherently with the costs involved, as by year two of your business, you should be able to see your investment pay off. In most cases, the profit kicks in after a year as there are higher overheads when initially starting your business. You should look at your financial position before investing in anything as there are usually other expenses you will need to fund aside from the financial fee. Make sure you have the funds needed as the last thing you want is to face bankruptcy.