FRANCHISE ASIA JAN 2016

Franchise Viewpoint
How do you know when you have found the right
franchise for you?
1. Growth potential in the market
The concept should have a sustainable growth potential in the
market at a local, national and international level. The analysis
or market research for this should be provided by the franchisor.
However, it is equally important to conduct a separate research
about the market growth and potential future competition,
especially at the local level, by gathering information from the
web, family and friends. Ensure that the concept is suited to
the locale targeted for franchise business, even if it has been
successful in some other part of the country or state.
4. Marketing and advertising support
The marketing needs have to be understood in detail. Some of
the aspects to be considered are:
• What are the type of marketing, sales building, advertising
programmes and resources provided by the franchisor?
• Is the franchisor responsible for ensuring that the marketing
and promotional campaigns are more effective than those of
the competitors?
• Does the franchisor leverage the power of online marketing
and social media?
• Would there be a monthly deduction towards a separate
marketing fund managed by the franchisor? How is the fund
managed? What is ROI for the fund?
2. Controlled growth of the franchise network
Analyse the nature of growth sustained in previous years. An
incremental growth in the number of franchise units is a good
indicator of future profitable growth. Also, the more the number
of units, the greater the brand awareness among the customers.
Be cautious if the past records show rapid or exponential growth.
Dig deeper into the franchisor’s recruiting or selling approach
and ability to support a rapidly growing network of fledgling
businesses.
3. Ongoing franchisor support
Ensure that the franchisor provides comprehensive training,
operations and business building support to help get the
franchise established and to keep it sustainable and profitable.
The franchisor should also be actively involved in keeping
the business at the cutting edge of product development,
management approach, and compliance.
5. Satisfied and enthused franchisees
Talking to the past and current franchisees will help in
understanding the challenges involved in the franchise business
and issues to be tackled. It is important to take the responses
with a pinch of salt as not all franchisee businesses can be
expected to be equally successful. But, if the predominant
opinion is negative, then it might be better to not enter the
business at all.
Franchise Asia • 2016 Vol 29
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