Is there a demand for the franchisor's products or services in the community? Is the demand seasonal? Is there likely to be a continuing demand for the products or services in the future? Is the demand likely to be temporary, such as selling a fad food item? Does the product or service generate repeat business?
What is the level of competition, nationally and in the community? How many franchised and company-owned outlets does the franchisor have in the area? How many competing companies sell the same or similar products or services? Are these competing companies well established, with wide name recognition in the community? Do they offer the same goods and services at the same or lower price?
A primary reason for purchasing a franchise is the right to associate with the company's name. The more widely recognized the name, the more likely it will draw customers who know its products or services. Therefore, before purchasing a franchise, consider:
* The company's name and how widely recognized it is. -- If it has a registered trademark.
* How long the franchisor has been in operation.
* If the company has a reputation for quality products or services.
* If consumers have filed complaints against the franchise with the Better Business Bureau or a local consumer protection agency.
Another reason for purchasing a franchise is to obtain support from the franchisor. What training and ongoing support does the franchisor provide? How does their training compare with the training for typical workers in the industry? Could you compete with others who have more formal training? What backgrounds do the current franchise owners have? Do they have prior technical backgrounds or special training that helps them succeed? Do you have a similar background?
Many franchisors operate well-established companies with years of experience both in selling goods or services and in managing a franchise system. Some franchisors started by operating their own business. There is no guarantee, however, that a successful entrepreneur can successfully manage a franchise system.
Carefully consider how long the franchisor has managed a franchise system. If franchisors have little experience in managing a chain of franchises, their promises of guidance, training, and other support may be unreliable.
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About Franchise Traders
Franchise Traders, Inc. is a licensed affiliate of The Franchise Alliance, Inc., the leading network of franchise specialists in the United States. Franchise Traders draws on over 25 years of franchise experience provided by The Franchise Alliance. Licensed affiliates in both the United States and Canada continually bring new franchise opportunities to the awareness of The Franchise Alliance, helping Franchise Traders identify the best franchise opportunities.