Published on 26/08/2016 by Punchmedia

Finding Your Franchise: A Guide to Buying One

With more than 1000 franchise brands, Australia is the most franchised nation on earth per capita. This means that there is a franchise operating in almost every type of business category with varying levels of complexity and cost. If you’re contemplating buying a franchise there’s a lot of choice and a great deal to consider ensuring that you make the right decision for you. You need to consider all the issues you would when purchasing any type of business, PLUS the specific issues of franchising.

6 key features to look for when evaluating any franchise business.

  1. Stable industry - You need to look at an investment that can ride the waves of the economy. What is going to be profitable regardless of what is happening in the economic environment? If possible, it is best to choose a product or service that people are willing to pay for at any time because they are time-poor, unable to create the product or undertake the task themselves, or is a necessity in their lives. Steer clear from unpredictable fads; these are unwise investments for the future.
  2. Market potential versus the competition - Consider franchises that have little or no competition from other established franchises that offer a similar product or service – particularly within the location you are looking. The ideal situation is to choose a franchise where the main competition are small independent or pop up stores. This provides the opportunity for the franchise to dominate due to its size and brand recognition.
  3. The leader in its category - Teaming with a leader in the category you are planning on entering will help with your potential success as a Franchisee. If there is an option between two or more franchises in the same product or service, investment outlay versus potential return is going to be greater with the leader than the followers.
  4. A dominant brand - Brand recognition is a major reason to invest in a franchise in the first place. So choosing a brand that is strong and established in the marketplace is more likely to provide a more solid, stable investment than a lesser known brand yet to entrench itself into potential customer’s awareness.
  5. A strong business model - A market leader needs to have a sound, proven business model that works to support both the Franchise and the Franchisee. Support for marketing and operational aspects of the business is key to buying into a franchise and these need to work for both parties to give the competitive advantage needed to succeed. (See below for more on the Franchise Model).
  6. Growth Opportunities - This is a little more difficult to define but it is the potential for you to grow and develop with the franchise. The best indicators of growth opportunities are that the franchise is thriving and has future expansion plans and activities in progress. There are also internal opportunities being offered by the Franchise to Franchisees including increasing numbers of outlets, become an area manager/developer or further entrenching yourself into the Franchise hierarchy.

Here are some tips on what to look for at a Franchise Level.

  1. Franchise Model - This encompasses all of the elements that set this particular franchise apart from another. The aim of these components is to add value at every process and business activity to work towards the success of the venture for both parties.The model is focused on the product or service marketed by the franchise. When the franchise is subject to change due to technology, competitive forces or government regulation, you will need to ensure that there are contingency plans and strategic programs in place to allow for this change. The best way to get a full understanding of the franchise model and relationship with the Franchisee is to obtain a copy of the Franchise Guide of the particular company you’re considering. Be sure you receive and evaluate all disclosure material before and during the application process.
  2. Franchise Systems - Unique to each franchise, this provides the framework for which the business model runs. It not only includes the Franchisor and Franchisee manuals but all systems, procedures, management tools and resources for the operation of the franchise.This also includes the key areas of marketing and promotions for the group as well as initial and ongoing training at all levels. This is the key interface between the Franchisor and Franchisee. You need a clear understanding of each party’s level of input, areas of responsibility, commitments (financial and physical) and performance indicators in each component from the outset. To fully informed, you should ask a lot of questions, particularly regarding upfront costs, ongoing fees, regional protection, success rates and exit clauses.

New Franchises on the Market

There are a number of new franchises for sale on the market at the moment we take a look at some of the top offerings:

  • Hogs Breath Cafe

    Hog’s Breath Cafe is a chain of franchised casual dining restaurants offering a diverse menu that is centered around its signature dish “Hog’s Breath Prime Rib”. Hog's Breath is like no other in the restaurant business with more than 80 locations nationally. Its business owners possess a strong bond with the franchise system and an enviable fellowship. It's a lifestyle driven company where the franchise owners of each store are “the face” of the business backed by highly trained and motivated staff. Find out more about Hog's Breath opportunities here.

  • Boost Juice

As a future Franchise Partner, Boost Juice supports and grows you into reaching your business potential and beyond. You don’t need to have lots of experience in business.

You just need energy, passion and a certain degree of business savvy to give it a go.

That first store in Adelaide has grown into over 350 boost juice bars in over 11 countries and across 5 continents – including South America, Asia, Europe, Africa and Australia.

This has grown into a global business community that enjoys big profits, ongoing support, product development and superior processes that keep Boost Juice as a leader in this competitive food franchise category.

The Mission is simple: to recognise and recruit high achieving people partnered with premium brands and together exceed expectations in both performance and profit.

Find out more about Boost Juice and Salsa's opportunities here.

At the end of the day, taking the plunge and buying a franchise is a big step so do your research and make sure to make an informed decision. If you're a budding business owner, entrepreneur or just think that buying a franchise could be the next step in your career and step towards a prosperous future, check out a wide range of franchises for sale by clicking here.           Finally, DO YOUR HOMEWORK! Research, research, research. It’s a big decision and information is power.

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punchmedia

Curtis is a leading expert in the business-for-sale industry, serving as a senior content creator at anybusiness.com.au.

With a career spanning over fifteen years, Curtis has accumulated extensive knowledge in the domain of business sales, acquisitions, and valuations. His deep understanding of market dynamics and his ability to translate complex industry jargon into accessible insights make him a trusted resource for entrepreneurs and business owners looking to buy or sell businesses.

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