What to Look for in a Franchise for Sale

New entrepreneurs looking to start a business often look towards franchising as an option. It’s no surprise – franchising is a system that has helped many Australians to achieve their goals and entrepreneurial dreams. Since you’re buying into an established brand that gives you a model with a predetermined structure for success, you gain the advantage of a proven product or service while still retaining agency as your own boss. However, since your products or services rely on your franchisor, it becomes critical to judge factors such as your prospective franchisor’s direction, vision, and the quality of the guidance it can give you. These factors are critical for the ongoing performance of every single franchisee.

Support is one of the key reasons why new business owners choose franchising over opening their own independent stores, as a supportive franchisor can give new owners support and information that help solve the difficulties that come with starting, owning and growing a successful business.

It’s, therefore, crucial to do a detailed assessment of your prospective franchisor’s support structures. This can reveal a lot about the business that you’re stepping into, and allow you to proactively anticipate and avoid danger signs as you move forward into purchasing a franchise.

To help your research along, here are three signs of a supportive franchise you can look out for.

Training

No matter how much you prepare, research, or visit other franchises to familiarise yourself with operations, there will always be that unpredictable element that comes hand in hand with being a new business owner. The franchisor’s capacity to give you detailed and in-depth training can allow you to know how to better anticipate and adjust yourself for new challenges. Good training can be critical to your continued success and the success of your franchise.

Evaluate your prospective franchisor’s training programs, and be clear on your own duties as a person joining the franchise. You shouldn’t need to be an industry expert to run a successful franchise – your franchisor should be experts in their own field, and train you into excellence where you lack experience. This is the main benefit of entering a franchise system.

To find out how effective the training program is, you should talk to current franchisees for their opinions, criticisms, and feelings about how their franchise prepared them to begin their business, and how prepared they were for the first few months they started their operation. Ask them about the strengths and weaknesses of the program, the availability of ongoing training and learning resources, and how effective these resources are as they now continue their development into new stages.

Marketing

Getting customers through the door is another challenge that many franchisees face.  Starting a business is hard enough – how do you sell it to more people?

Check your prospective franchise has wise investments and dedication in their marketing strategies, either in national marketing tactics or initiatives in the local area you wish to be based in.

Most franchise models require a marketing levy, and under regulations, they are then required to disclose certain information about the funds, and how they use them. In fact, the Australian Competition and Consumer Commission (ACCC) requires franchisors to prepare annual financial statements that detail all the receipts and expenses of how they used the fund. This statement provides important information about what contributes to the fund, and what it has been spent on.

Before you buy, ask the franchisor about how they spend their fund, and their marketing strategies. What mediums are they using? Is social media advertising included in royalty marketing fees?

Establish what you’re paying for.

Direct Communication

A supportive franchise will usually give you a direct line of communication, but more importantly, they will provide you with a field support manager (FSM). In the first few months of operation, your FSM will be conducive in helping you handle your day-to-day issues in business ownership. As they’re repositories of knowledge both within the sector and specific to your franchise model, it’s the sign of a supportive franchiser when they invest strongly in FSM support and other support staff.

When the FSM and you, the franchisee, work equally hard while having constant and deep communication with one another, you have the start of a great working relationship. Don’t be shy about reaching out, or asking direct questions as you develop your business – you’ve bought a model that works best when it’s followed, so it’s only logical for the franchisor to provide support through every stage of your franchising journey. They’ve done this before – they know how to guide you. Franchising is a big step, but with the right support and communication from the franchisor, it could be the right decision for you.

Conclusion

Whatever you’re preparing for, franchising brings specific challenges that differ from operating an independent operation. One of the most important factors in deciding what franchise to join, as well as your future success, is support. Having a supportive franchisor guide you is critical to ongoing success – so before you buy, make sure you evaluate the support systems a franchise provides.