3 Questions to Ask If You're Thinking of Franchising a Business
Going into business by getting a franchise can be challenging. The ever-growing competition of concepts and brands makes it difficult for aspiring franchisees to select the best franchise for them. In fact, there are 2,000 franchise brands here in the Philippines, both foreign and homegrown. Then there is the matter of resource allocation and location viability, which are equally important if the long-term success of a franchised business is what’s sought after.
But even with these challenges, many entrepreneurs have become successful in the franchising business. With careful scrutiny of the playing field, many franchisees have successfully started their business, with some owning multiple franchises or even starting their own franchise brand later on.
If you are interested in going into business by getting a franchise, you first have to empower yourself with the right knowledge so you can better prepare for what’s ahead. Here are three important questions you have to ask yourself before getting a franchise:
1| What brand/industry do I want to get into?
Know your brand.
There are hundreds of franchise brands here in the Philippines and many times more internationally. These are generally categorized into three industries: food, retail, and service. Among these three, the food and retail industries remain the most active segments.
If you want to go into the food industry, there are lots of brands available for the taking. From kiosks and food counters to full-blown restaurants, the selection is rich and diversified. The retail industry offers almost the same variation in concepts from health and beauty products to gadgets, clothing, home essentials, and more, but the service industry is also catching up with the easing of restrictions, making salons, clinics, and other service shops more profitable.
After you identify which industry you would like to get into, the next thing you have to know is which franchise brand to get. Most franchisees select the brand that they love, the brand they are a customer of and are passionate about. Some franchisees choose a brand that’s unique and appealing to certain market segments. There really is no one best franchise for everyone; the challenge lies in selecting the right franchise for you.
2| Does the investment requirement fit my budget?
Know your budget.
Let’s say you have decided which industry and brand you would like to get into. Your next question is “Does the investment requirement fit my budget?” or vice versa. Capital is very important, and you may allot a huge chunk of your savings to start your business endeavor.
However, there are practical ways to manage your resources. You can take a bank loan for extra support (but don’t loan the entirety of the investment). You can also pool resources with other like-minded aspiring franchisees. It is important to make sure that you are not left with nothing after buying a franchise because you will still have to take care of other operational expenses.
3| Where is the best location for it?
Know your location.
Location is one of the most important factors to the success of your franchise. You can get a popular franchise brand, but it will encounter challenges if your location is not right.
Once you determine that the investment requirement fits your budget, the next thing to identify is the best location for your franchise. How? You can get help from brokers and location hunters, who are experts in finding the right location for your franchise and helping you negotiate the terms with lessors. These experts assess the location viability and suitability through evaluating market factors.
The right location for your franchise can bring a multitude of rewards. It can bring in more customers, which will result in more profit. It can boost your brand recognition. It can also strengthen your accessibility, not only to customers but also to suppliers, delivery service providers, and more.
Need help choosing the right franchise for you? U-Franchise provides FREE Franchise Matching Consultation, application assistance, and location acquisition services. You may contact U-Franchise Sales & Management at (+632) 8634.05.86 or (+632) 8634.37.17, (+63920) 983.02.47 or (+63917) 881.69.99, or email [email protected]. You may also visit their website at https://www.ufranchiseasia.com/.
Sam Christopher Lim is the current President of the Philippine Franchise Association; CEO of Francorp Philippines; Co-author of 12 Strategies for Franchising book; President of U-Franchise Sales & Management; and Chairman for ActionCOACH Philippines.