Tips for Gathering Information Before You Buy a Franchise

Franchising is one of the most popular business models available in the world right now. Due to its particular advantages, such as tested management methods as well as additional support from the franchisor, newcomers are fond of purchasing a franchise to start their new career.

There are thousands of successful franchise companies available in the marketplace now, which cover almost any field you can think of. For example, XIMIVOGUE in the fast fashion industry and McDonald’s in fast food are representatives of their respective areas. Their business models and training systems have successfully assisted the franchisees to seize the business opportunities and drive the development of the stores dynamically.

However, before you make any decision in which franchise you are going to work with, thorough research is crucial to understanding how your potential business could run entirely. If you are already talking to existing business owners who have purchased your favourable option, you are on the right track.

1.Speak with existing franchise owners
Talking to current franchise owners can yield unexpected results during your information acquisition process. However, before you speak to them, try narrowing down your potential options under three; otherwise, the process will be too hectic and time-consuming for you.

During the chats with them, you can understand much better how a franchise owner can run his store, as well as any additional preparation that is essential in the negotiation process. The owners’ experience and feelings are something that is off the paper, which can be invaluable when assessing your opportunities.

2.Respect others time
When you are speaking with the existing franchisees in step one, remember that it is not compulsory for them to talk to you. Therefore, make sure you show respect to their time when they agree with your proposed meeting. Being informed and well-prepared for the chat. Furthermore, you can send your list of questions that are ordered by importance level to your guest in advance, so that both parties can be prepared and efficient in yielding the best outcome.

3.Get your questions ready
Although you might have a million questions to ask, having a short list of meaning ones can significantly aid your discovery process. The questions should focus on franchise training and supports, operation process, as well as the validity of any business and marketing strategies.

Once again, let’s use the Korean style fast fashion franchise XIMIVOGUE as an example. The company stated that it would provide continuous training and on-site manager from the headquarter to assist the operation; moreover, they also offer other technical supports, such as logistics and software tool for management. In this case, asking questions such as ‘how the logistics run and how I can maximise the benefits from this supports’ can be helpful to identify whether this firm suits your style.

4.Discovery process is important
Here it means as a potential future franchisee, you should not take the process for granted. The discovery process belongs to yourself and yourself only. Treat it as finding your significant half. For example, before you go to the franchise representative, think about what you can do now and during the meeting. The same principle applies to the later process. Due diligence must be made to ensure you will not regret after you formally ‘married’ with the brand.

5.Search for any trends
There are two parts in this ‘trend’ here and allow me to explain it to you.

The first meaning is the trend in the marketplace. If you are looking for yielding a significant amount of revenue in your targeted market, researches and forecasts on various popular industries are recommended. Though they may not be the franchises you emotionally attached to, you need to face the reality that business competition is fierce and emotionless. Thinking about maximising profits is a rational method to secure your investments.

The second part of this ‘trend’ means finding the characteristics of successful franchisees. An experienced franchisee avoids one comment from others outweigh the opinions from other sources. Taking in all information, finding out the reasons they made those statements, as well as criticising and summarising useful perspective can help you grasp more opportunities than your co-workers.

To improve the quality of information acquisition, consider applying these six tips in your discovery process. Another small tip to go after firms with comprehensive disclosure system, such as XIMIVOGUE. In this case, you can save some efforts in digging that valuable information out.

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