Tips on choosing a good and profitable Franchise. Maybe all this time you thought that buying a franchise it is always profitable. Because in the system of franchise or franchise, the risk has been minimized by such that the franchise (called franchiser). Such thoughts did have a point, though it is not always true in practice and reality. Why buy a franchise business failure risk is smaller than opening their own business? This is because if a starting a business with its own method of “Trial and error”, the possibility of failure is enormous, let alone no associates or relatives who guide him in a new venture from it. As if buying a franchise, the risk of failure can be minimized, because the company’s franchisees (franchiser) already provides everything to support investors (franchisees), including surveys, methods of marketing and promotion, licensing, raw material, management, labor/SOP standard, interior design and more.
According to John Naisbit in his book entitled Weblogs inc, said that franchising is a marketing concept that is most successful in the history of mankind. According to him, in the USA, every 8 minutes, born one oulet franchise. This new concept has become a hot topic among the corporate world and the media business. As a result, more and more people are attracted to named the money by buying a franchise or just business license or at least know more detail how a franchise system that actually, it can be seen from the ‘ sweetness ‘ bestselling books that explore issues of franchise or franchise and the high interest of visitors in the exhibition event of the franchise.
Why local franchise many have nurtured? Failure in a franchise business can be a factor of his franchiser or franchisee of his (investors) or factor accumulation from both sides. For the franchiser, sometimes because the business that he offer unproven benefit, but it’s been dared to offer a franchise concept to potential investors. Just look in print, an awful lot of advertisements offering the concept of cooperation in the form of “franchise”, but not necessarily its businesses can already found as “franchising/franchise”, it could be just in the form of “Partnership/Business Opportunity (BO)” or just simply the use of a brand name or license.
From news stories circulating, did in fact much success by buying a franchise franchise business, meaning that it purchased goes according to expectations, where the sales targets until the Break Event Point (BEP) and ROI (Return On Investment) aka “turnover” can be exceeded, and finally the business like money tree, just reap the benefits of the initial investment.
However, it turns out not least also the investors who bought the franchise suffered losses in his business. Indeed the loss of franchise news is seldom published in the media. If you are observant, in newspapers or magazines, it has often been a franchisees put ads to sell all the equipment and its franchise system, for various reasons. Come to think logically, a business that’s like a money tree for the owner (if profitable course), if a business is sold, there is definitely a “why-why” so sold. Most likely the business is a franchise system that sold it didn’t turn a profit or business franchise purchased “not selling sweet” and did not achieve the sales target, so that the franchisee solely in the operation of its business.
The example above, perhaps only one, we may often see a franchise whose outlets were closed, does that do business in areas such as restaurants, salons, the tavern burger, book store, laundry, retail, to educational institutions, from small to large scale, from being able to survive in a couple of years until that operates only within a matter of months. But like the sound of this franchise business, the proverbial broken grow missing switch, franchiser and franchisee always appear new.
Several factors cause the failure of most major franchise is the failure of adequate sales target achieved, this is usually due to a less convenient place of business. Other factors include the lack of support from the seller to the franchisees franchise for example in support of the promotion, management and others so impressed franchisees running alone, and there was also a rise in the price say because raw materials and inflation imposes weak purchasing power of society in General. In addition, factors that are not less important is the “mindset” franchisee/buyers who thought that buying a franchise franchise that means living and fortunately received “too expects” the franchiser works, or hopefully on a system that works. The franchisees when it should also work hard to promote and monitor the system, the store is already going well or not. Moreover, if the business that entered is a food item basis a lot and really need to set up management logistical, considering food only hold a few days before it was damaged. So don’t get wasted.
Currently, the most crowded in the business-franchise is in the food business, it’s known, because food is the most basic human needs, and all human beings need to eat.
Thus emerging franchise engaged in these foods, as derived from abroad include: McDonnald, KFC, Dunkin Donuts, and others. While that from local, among others: RedCrispy, Andrew Crepes and others. In addition to the franchise whose products include food, there is also a franchise whose products include non-food and services, for example in the field of education, the delivery of the goods, hair salons, clothing and more.
A few things to be aware of before you buy a franchise:
Whether the franchise is indeed fit for you? every year more and more people who dream of coming out of the routine 8 a.m. – 5 p.m. and has an own business system (either self or self-employed business owner). However his name to build a business can be a daunting process. Building a business can be said to be a thing that requires concentration, focus and persistence are high.
Franchises are often seen as a smaller business risks. Franchising gives You the opportunity to open your own business with the support and back up from franchiser. But the franchise is not always suitable for everyone.
Whether the franchise is an option appealing to you? Franchising is a business an attractive option for the beginner, because franchise allows you to infuse money into a system that is already well established, has been tried and tested, and proven success. But for businessmen who are already poor transverse in the entrepreneurial world, it might not have been a franchise bid so attractive anymore.
The franchise is not a guarantee of success. As mentioned at the top, especially in Indonesia, the franchise failure rate is still quite high, however, as an investor franchisee you will get help from the franchisees. However You still need to motivate yourself, have movement and commitment to hard work to build a successful business. The franchise is not a guarantee of success. Although a degree of success has been achieved, the legwork is required in order to maintain profitability.
If you decide directly jumped into the business, prepare mentally and mature, because there is a difference between the atmosphere of “uncertainty” in the business world and the ‘ comfort zone ‘ in the world of employee with a monthly salary and routine.
Various levels of investment in the franchising world wide. Customize your options with your financial ability, do not exceed the capacity. Usually the franchiser will provide information about the performance of other franchisees as the image. However, of course this is not a guarantee for success. You need to examine the potential business itself around you and when you need to seek professional help in making financial projections. If you can talk to other franchisees who bought the franchise, how his system, supporter, its financial projections, its potential, etc.
Some considerations in choosing/buying a franchise or franchises include:
The brand is already well known and has a positive image in the market. Therefore, buying a franchise is not just buying the system, but the brand. If the brand has not been well known, it is difficult for us to obtain the maximum turnover as the market has not been aware of the franchise brand. In addition to the brand, as well as products and systems. What is the product of “qualified”, if its product in the form of food, are delicious, if unique, is easily created or not, whether there are secret recipes so difficult in resembled competitors.
Who is behind the scenes. Well we need to also find out, who is the developer behind the franchise’s name in selling the latter. It is like we are buying a House/apartment, of course we also have to look at the credibility of the developer of the housing sold. Likewise, by purchasing a franchise, if necessary also search for information about the owner/developer of the franchise. Whether the franchiser that we are interested in is a successful company and Franchiser is obligated to provide strong, the financial statements have been audited by a public accountant to prospective buyers of its franchise rights. The report can be given the company’s financial state information for a period of 3 years.
Place. Place of business we choose an absolute must strategist, lively and accessible from anywhere, the parking lot should be broad. If you look at the business place McDonald, mostly located in the most strategic location in any parts of the world, junction road, anyway the most strategic place. Totally wrong if some people say that their business is not a burger, but the property.
Do research in General about the franchise on seek. Make sure you see the opportunities in business that will run. Find out as much information about the franchise of interest. For example, figuring out how the level of sales, support, system weaknesses and advantages the franchise from other franchisees who have first purchased and run the franchise. make sure that the franchise has a sustainable brand management guidance, quality control, administration, guidance staffing management and other technical instructions. Please attend a franchise seminar and exhibition in to get as much information and comparisons of the best.
Please choose a franchise that suits your interests and passions, and you are sure the franchise will benefit in the long run. Avoid selecting a franchise because of the factor of “trend” solely.
Please choose a franchise that suits your capital. Some franchise businesses there is a failure in the middle of the road because of lack of capital. Therefore, to increase the chances of success, it is better to have more capital than required franchiser. It is recommended to have a backup of the Working Capital Fund for 6 months to 1 year to the next.
You may need to seek advice from professionals (franchise consultant) to accompany you.