Best practices when opening a franchise
- Tuesday, July 10, 2012
A small business opportunity comes with a lot of questions that need to be answered in order to ensure a successful franchise. How do I market my brand to a large target audience? Where is the best location to set up shop? Do I have the necessary capital to survive the startup period?
It can be confusing and stressful to try and answer all of these inquiries at once, so take a step back and evaluate the following aspects of your business when considering a franchise opportunity.
Franchising versus new business
"I think you really need to ask yourself what a franchise will bring to the table for you," said James Buonfiglio, president of C&B Consulting Group, according to CNN.
Before even embarking on a franchising expenditure, you need to weigh the pros and cons of opening your own business versus taking on a franchise name. Franchising offers a lot of advantages, but you'll be limited underneath the overseeing company's corporate policy - basically, you won't have the total freedom that comes with running a unique business.
However, this also limits the work needed during a startup phase. A successful franchise provides managers with guideline and support documents that detail everything from employee hiring to bathroom sanitation. Plenty of people have gone before you and made mistakes, and a franchise has the experience necessary to ensure these never happen again. On the other hand, if you open a new business, it will be like treading water for the first time - you'll have nothing to base your procedures on.
While this might seem like a minor concern, a franchise will amount to nothing if it is located in the wrong place. You need to consider the two aspects of a location - financing and traffic. From a monthly or yearly rent standpoint, you need to be able to afford payments and lock in a standard price for the next few years. Otherwise, a landlord might increase rent exponentially, and you could be forced to close your franchise and start all over again.
In terms of traffic, you need to place your franchise in a building that is close to major roads, or at least easy to find on a map. This way, potential customers can be reached by advertisements when driving or walking by the building. This is especially important in food and beverage franchises that rely on impulse purchases.