One of the more interesting business opportunities that is often overlooked is the food franchise. As you might guess, there are many of these franchises available in the food and beverage area; they’re easy to find too. But how do you know whether or not a particular franchise is worth the price?
Obviously, it’s important to do a proper evaluation so you can be sure that you will have a successful business that has the opportunity to grow. Here are four questions you should answer that will help you in the decision-making process:
Does the franchise have a good track record?
This does not imply that the franchise needs to be national in scope. In fact, many of the best opportunities will be with franchises that are only beginning to expand across the country. The key is to look for a franchise that has several stores already in operation over a long enough period to prove that there is a strong demand for their product.
Is there growth potential?
Some franchise offerings are so well-known that they have saturated the market — which is why, in certain areas of the country, opening a new franchise means competing with others to a certain extent. Ideally, you want to reduce your business risk by ensuring other franchises in the chain are as far away as possible from your preferred location. In addition, you want to have a product that doesn’t have a lot of competition from similar restaurants.
Does the franchise have a good reputation?
It’s important to have a name that is recognized and produces positive feelings. One of the worst mistakes you can make is to invest your hard-earned money into a franchise that suffers from bad press relating to poor quality or disputes with the local community. It is okay for a franchise to be unknown in the community; some of the greatest franchise opportunities are the ones for companies that have no local presence. For those instances, you’ll just need to spend time building up the brand’s reputation in the community you will be operating in.
Do you love the product you’re selling?
It’s important to sell something you enjoy and believe in. If you buy a Chinese fast food franchise, but you don’t like Chinese food, your success may be limited. The truth is, it takes a lot of hard work to become a successful franchise operator, so you better love what you are doing.
Remember, not every franchise has to be a hamburger or sandwich restaurant. There are many franchises that are outside the norm and have shown success.
If you’re considering a food franchise as a potential business opportunity, make sure you do your due diligence. The best way to do that is by taking your time and evaluating them carefully.
Photo Credit: jericl cat