Franchise gives a businessman or investor great opportunity to operate a unit of an established brand. Many successful brands for different industry sectors, both products based and service based, have sold their units to the entrepreneurs in lieu for franchise fee and royalty. The overall business process of franchising is simple to understand.
Business franchising does not observe frequent developments and the best practices continue to hold true for a long time. While going through the contemporary practices and trends, we made a list of useful tips, a few of which are given below:
Franchise Management: Before entering into a contract or buying a franchise, the franchisee has to ascertain an efficient franchise management team. The team would be responsible for key business tasks and operations. There must be a proper management structure and great help can be availed from the franchisor.
Purchase Team: The purchase team would be the key members required while making the deal. The team must have an accountant, lawyer and franchise consultant or manager hired to provide the professional advice. Franchise consultants or the managers are also sought to negotiate on terms and conditions, usually the franchise fee. So make sure that the purchase team is prepared for their roles.
Market Analysis: Again this assignment precedes the process of buying a franchise. It is beneficial that the interested investor or party examines the trends in the market and the performance of particular brand he intends to buy. Some investors even have feedbacks from other franchisees. It is recommended to have a good knowledge about the performance of brand.
Exit Strategy: Like other business ventures, the franchisee must know in advance as the procedure to end the contract and close down the business. Exit strategies in franchising business are very simple and there are no major losses that can be incurred incase of any contingency. So, the franchise must be aware of the exit strategy before signing the contract.
These tips come in very hand to the investors who are about to buy a franchise.