How to recognize a good franchise system
The number of franchise systems active on the market is increasing all the time. In the UK alone, potential franchisees can choose from hundreds of different franchise networks. But how can budding entrepreneurs recognize which of them are good franchise systems? Additional checks should always be carried out before a franchise agreement is actually signed – for example by a lawyer specializing in franchising. Potential franchisees are able, however, to look for certain criteria when making their preliminary choice, which can help them to separate the wheat from the chaff. For, a great deal of information can be found about franchise systems on the Internet as well as in the franchise information sections published by FranchiseKey.
The concept of the franchise system
The first thing you should do is to check the quality of the core idea behind the franchise system. Is the franchise concept something that is truly innovative, that is really unique on the market? Has the franchise system already succeeded in really establishing itself on the market? Has the franchise system already reached its zenith and begun to lose its attractiveness? Is the franchise system a mature system or are there some traps that you might fall into if you wish to implement it on the market? Is the idea of the franchise system protected by patent or is it easy to copy?
Besides this, you should have a look at the competitors which the franchise system has to face. “Google around” a bit and type in key terms about the franchise system. Is there another supplier that appears to be more professional? Or is the franchise system market leader? What are consumers saying about the franchise company on Internet forums, have independent reports about the franchise system been published in the press or other forms of media? Have a look under http://news.google.co.uk or http://uk.news.yahoo.com. Does the franchise system provide something which customers need long-term or is it something which may soon become uninteresting for them? What kind of impression does the website of the individual franchise systems make on you? Does it provide useful information about the franchise system or is it simply striking? Are facts more important or large bold words?
It is definitely worth researching franchise systems
No matter which franchise system you wish to check up on: you will find a great deal of information on the Internet that will help you to make an initial assessment of those franchise systems you find interesting. Perhaps whilst researching the franchise system, you will discover other franchise networks which are even more interesting.
New systems or systems which have not yet fully established themselves on the market can, of course, also be good quality franchise systems. In such cases, however, you should examine the business concept in even greater detail and the minimum prerequisite must be for the system to have a pilot location which is being operated successfully.
Visit the franchise system’s locations
Another possibility is to visit one or several of the network’s franchise locations or test out the services provided by the franchise system by becoming one of their customers.
Franchise memberships and awards
Being a member of an association or being an award-winner may also be a sign that you are dealing with a good franchise system. Franchise systems which wish to become a member of the British Franchise Association (bfa), for example, have to fulfil certain standards. However, other memberships – for example in trade associations – can also demonstrate that the franchise system is a good quality network. Here, though, you must always check that the association in question is one that can be trusted.
The same is true for awards that have been presented to franchise systems. However, it is not always possible to see straight away which of the awards presented to franchise systems and companies are relevant. It is quite common that a nomination or an application submitted for an award is presented as if the franchise system had actually won the award. If awards are won from well-known institutions or magazines, then this generally is a sign that the franchise system in question is one of good quality. It is, however, worth looking at who was on the jury and what the selection criteria were for the award.
People, who take these and other aspects into account when checking franchise systems, should soon have put together a short list of franchises that appear to be very interesting. These should then be examined in even more detail before a final decision is made.