How to Select the Best Franchise

What’s Better - Larger Brands or Start Ups?

Franchise businesses are all around us and in almost every industry, creating business opportunities on a consistent basis for individuals around the globe. When people think of franchises, the first thing that often comes to their mind is a big name like McDonalds, although franchises are available both with large corporate groups and smaller family owned start ups. How do you choose the best franchise opportunity for your business and financial goals and needs?

Brand Opportunity

When investing into a franchise opportunity, one of the more important things to take into consideration is the brand opportunity. Many business owners and entrepreneurs are attracted to a franchise opportunity for its established brand, allowing them to move into a market without having to establish it on their own. Most of the larger franchise opportunities will already have an established brand. However, smaller franchise opportunities may have a well established brand presence within the community that they were founded in. While a brand presence is certainly a significant benefit, the brand presence of the franchise that you are investing into does not necessarily need to carry national weight.

Systems and Structure

One of the other reasons that many individuals are attracted to franchise opportunities is for their established systems and structure. Systems and structure is required to take a business to a larger scale, something that you will generally find with the larger franchise brand opportunities. It takes time and trial and error to build systems and structure that yields the best results. So, when you are considering whether to select a large franchise opportunity or a start up, consider that the risks are generally lower when working with the former.

On the flip side, it can be frustrating for those entrepreneurs who are seeking to impact an organization as a larger franchise opportunity is already well established. Most of the larger franchise opportunities have every kink worked out and every system in place, along with a process to make updates and changes on an ongoing basis. Also, working in a larger bureaucracy may mean that the decision making process to open a new unit and for the approval for you as a new franchise owner may be considerably longer than that of a smaller start up franchise opportunity.

New Unit or Acquisition?

When investing into a franchise, some investors will open up an entirely new unit or location, while others will purchase an existing franchise unit within a larger or small franchise opportunity. Walking into an established unit of a franchise often allows the business owner to not only see the results of a franchise unit, but to quickly move into a territory with an established customer base, rather than building a new franchise unit from scratch. For someone looking to get into a franchise in a quicker fashion than starting from scratch, buying an existing unit from a current franchise owner may be a very appealing option to consider.

While there is certainly not a magic bullet to help someone select the best franchise opportunity for them, taking brand presence, systems and structure and the risk of building a new unit or purchasing an existing one into consideration will help to make the process smoother.

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