franquia-ideal
Entrepreneurship

How to choose the ideal franchise

Acquiring a business, for many, is a dream come true! I've watched many entrepreneurs invest all their accumulated capital, sell assets, resign, to realize their dream of owning their own business, of being their own boss, and after a while, they lose everything.

A Franchise is a great option for those who have little administrative knowledge and are looking for a partner, not a partner, to share responsibilities, as well as a win-win system where the parties involved must contribute to everyone's growth.

The Franchisor must develop the brand, marketing, products, logistics, suppliers... and above all, he must know how to teach the Franchisee how to operate his unit, therefore, it is essential that he has already operated Franchises, and mainly has the business that is his Franchisee, to testing and developing the business as a model for the network.

To choose a good business in the Franchise system, it is important to follow some tips, which will ensure fewer headaches and a greater probability of success.

  • Choose a segment that you identify with, that you really enjoy working in, remembering that a Franchise contract can last from 2 to 4 years or even longer, so choose to work with pleasure;
  • Study the local market, competition, audience for the product/service (especially if it is new) and select attractive brands that can serve you in every need, even from a distance and do not charge more for it;
  • Compare the values that make up the Franchise price: investment in structure, stock, working capital, royalties, marketing fee, don't forget to ask about extra costs, not described in the initial investment, that may occur during the Franchise's operation, such as a consultant visit, exchange of merchandise, mandatory purchase of stock…
  • Preferably do not use bank investment to acquire your first Franchise. A Franchise, like any investment, has risks relevant to the sector, in this case look for an Economist to help you analyze the viability and risks.
  • Select the commercial location within the details provided by the Franchisor: size, stock space, customer flow, facade, parking, analysis of neighbors, public... as well as values appropriate to the business's cost assumptions.
  • Analyze the multichannel commercial policy, if you do not have exclusivity in your region and the selected Franchise sells the same products through other sales channels. Be careful, your Franchise can become a show room;
  • Analyze the COF – Franchise Offer Circular carefully, preferably delivered to a lawyer in the area to analyze. All the system, rules and duties of both parties, Franchisee and Franchisor, must be described in the COF, as well as any and all costs and investments that must be made during the contract period. This is the time to negotiate;
  • Every good Franchisor must present a study analyzing the Financial and Economic Feasibility of the Franchise you are going to open, with the costs and expenses appropriate to your city, revenue forecast, with this you will be able to have a forecast of the return period and, above all, compare the rates of return with other investments available on the market;
  • Check with as many Franchisees in the network as possible about the level of satisfaction, questioning relationships, service, logistics, product supply... ask if they would buy again, what rating the Franchisee would give, don't settle for less than 8;
  • Also contact Franchisees who have left the network and ask why;
  • Search the INPI – National Institute of Industrial Property for the trademark registration and who is the owner;
  • Only pay the Franchise Fee when signing the Pre-Contract or Contract.

Conex Negócios hopes to be able to help you at this important time!

Remember: Fortune favors the well-prepared mind – Louis Pasteur

Conex Business