Entering the world of hospitality businesses can be an exciting new pursuit for a would-be business owner. Naturally, a budding business will inevitably need to deal with challenges in order to stay afloat; however, with sufficient time, effort, financing, faith and ingenuity, great opportunities exist for smart buyers.
This is why franchising is one of the best business ideas for aspiring entrepreneurs. When you buy a franchise, you pay for the right to sell products or services under a certain brand. Essentially, you’ll be running a business that doesn’t require as much pre-planning as a business from scratch, while capitalising on what the franchisor has already established in terms of the brand’s identity. However, just like any other business venture, there are certain factors you need to consider before buying a franchise.
What are your plans for growth? Are you okay with being given restrictions on how you run your business? Can you devote a good chunk of your time towards ensuring that your franchise will be successful? Take some time to assess how you feel about your planned venture, and you’ll surely see success.
2. Your financial options
Assess your own financial capabilities, and think about whether you can sustain the expenses (aside from the upfront cost) that come with franchising. If you’re worried about how much you’ll have to invest at the start of your new business, partnering up with someone might be a good option to shave the costs.
3. The franchise’s history
Are you eyeing a well-known brand? Find out how the franchise as a brand is doing and also consider specifically similar stores in similar areas to the one you are considering buying. You could also try talking to other franchisees – ask them about their working relationship with the franchisor, if they receive sufficient and timely support, and most importantly, if the business is thriving and why/why not. Finding out what the best run businesses are doing can help you get a head start in your business’s journey to success.
4. The terms of the franchise agreement
In order to have a satisfying and successful deal, you need to understand the terms and conditions stated in your franchise agreement. Read it thoroughly – what are your responsibilities as a franchisee? What kinds of restrictions apply to your business? Also, don’t be afraid to ask for legal assistance for terms you don’t fully understand.
5. The statistics
Find out the success and failure rates of the franchise you’re interested in. You should also examine how many franchises are sold per year, as well as how long it took before the franchisees sold them off. Lastly, look at how much the franchises were sold for.
6. The business itself
Understand the business you’re getting into: the ins, outs and current state of the industry. It also helps to do research about the competition’s prices, reputation, strengths and so on. This will help you to really understand the industry and how you could make the most of this opportunity and make the best decisions.
Of course, the best way to ensure that you’ll find the best franchise opportunities for hospitality businesses is to consult an expert in hospitality business sales, like Redmako! View our businesses for sale to find some of the best hospitality franchise opportunities available in Queensland.