For potential investors and businessmen, the education franchising sector offers immense growth opportunities. However, once a decision to buy a franchise has been made, the potential franchisee needs to clarify some points necessary to become a successful franchisee.
How Franchising Works?
In order to become a profitable franchisee, it is better to have a grasp over the basic franchise concepts. To buy a franchise may appear like a simple task to accomplish, but it isn’t that straightforward. There are many different franchising formats. For example, an investor has to decide which franchise format would be easier to manage and more profitable. There is a choice between manufacturing and business-format franchise. Some people are content with selling a brand, i.e. brand franchising.
A potential investor should know about:
• Franchisee-franchisor relationship
• Limitations in a franchise set-up
How to Buy a Franchise?
The most important evaluation has to be about an investor’s individual financial status. Other important aspects of planning to buy a franchise include:
• Financing options — these options could be provided by the franchisor himself. Usually, once an investor is related to a particular brand, it becomes easier to avail finances from banks and credit institutions.
• Franchise agreement — this is the defining document and the very sole of the franchise-franchisee relation. The agreement incorporates everything from the franchise fee to the extent of a franchisee’s rights.
• Franchise consultants — some people are confused about how to buy a franchise. Such potential investors could seek the help of a professional like a franchise consultant.
Buy a franchise or franchisee?
Some people prefer to buy a franchise opportunity directly from the franchisor and establish their own business, i.e. a new business set-up. This offers the opportunity to start fresh with your own space and infrastructure. On the other hand, there are investors who seek to buy a franchise that is already in operation. The investor benefits from a business format and infrastructure that has already been created and is actually in operation but to buy a franchise in the form of an existing franchisee has greater risks attached to it. A franchisee-owner selling his business has to explain the reasons for such a sale and his financial liabilities.