However, a seemingly suitable franchise will not guarantee you any success if it is not great. Being good is not enough – You would not want to invest tens of thousands of dollar on something less than great. What’s more, investing in a great franchise reduces your risks in starting up phase, as well as prolongs the business life cycle considerably.
What make a great franchise?
Here are some guidelines that indicate whether a franchise is great or simply good:
- Offer everlasting products or services with everlasting potential
We can not deny that conservative products or services are the best bet – They are time-tested and “purified by fire” – Those are what make a franchise stands out for decades. Some examples of this are obvious: fast-food franchises, business service franchises, tutoring/learning/education franchises and auto parts franchises. - Invest heavily on product or service development and differentiation
You should inquire on a franchisor about what they have done through the years in better their products or services, as well as what the new additions to their core business are. Offering the same thing for years is not desirable, especially in today’s harsh competition and rapid shift in customer’s need and want. - Provide outstanding support and assistance
There are misconceptions among franchisees – Outstanding support and assistance is not measured by how well franchisors tackle your franchise units’ problems; your units’ problems are yours – They are your business, after all. Instead, the right measures for outstanding support and assistance are: The quality (and quantity) of training given to you and your employees, the ability to guide you when you meet a dead end, and your franchisor’s ability to promote and market the brand name, as well as the products and/or services, in a way that the impacts are visible across all franchise units. - Develop and maintain a strong and well-proven system
Franchises’ power is in their system. A strong, well-proven system is the main factor that separate great franchises to the rest. McDonald’s system is so strong, that you’ll see the same system implementation (even including the store design) from Italy to Indonesia.
What about new, innovative, franchises?
New franchises offering innovative, nearly-novelty, products or services are, in my opinion, not necessarily great franchises because they are not time-tested. Joining such franchise will put you as pioneer – Unless you have strong risk taking ability and are highly entrepreneurial, you will falter if the unknowns happened.
Every new franchise can be good, as everything great starts as being good. But unless a franchise becomes great, I suggest you to be conservative and play safe. Why? Because franchising is, by nature, non-aggressive – Otherwise, you would better off starting your own business, instead of investing in a franchise.
Ivan Widjaya
Choose a great franchise. Period.
Image by Tony the Misfit.
