3 Things to Consider When Choosing a Franchise Business

Posted on 9 May, 2018 8:06:15

When you’re considering buying a franchise business, there are many things to consider before making your final decision. We take a look at just three of the many aspects you should give consideration to.


It may sound cliche, but there is possibly nothing more important than your new business being where your prospective customers can find you. In a franchised business, the Franchisor will generally have already completed due diligence in relation to the viability of the location – but it is always advisable to form your own understanding of the area. You may take into consideration foot-traffic in the local area or shopping centre, how busy the roads are proximal to your premises and, whether there are competitors close by offering a similar product or service.

It’s important to compare the target market of the business with the demographics of the area the business will be operating in. Whether you’re looking at a service-based business or, a retail shop-front, you’ll want to be sure there are plenty of people in the area who fall into the primary and, secondary target markets for the specific products and services on offer. For example, you might find that a baby-goods store in a shopping centre with an aging demographic may not be as successful as if positioned in a shopping centre near a new-housing development.


No matter your previous experience, when you invest in a franchised business there is usually a lot to learn. Franchises are generally an efficient way of doing business as systems and processes are developed to ensure all franchisees operate consistently. This often includes a significant training period for new franchisees to ensure they are ready to operate their business in line with the Franchisor’s expectations.

When you consider buying a franchise, it is good practice to understand the commitment you will need to make to undergo required training. You should also seek to understand the intended outcomes of the training. For example, will the training teach you how to effectively deliver the value proposition of the business or, the detailed information about the products or services you will be selling? After the induction training is complete, will you be able to successfully operate your business?

It’s also useful to know whether the Franchisor provides ongoing training and mentoring, for you as a franchisee, and for your staff. Consistent training and development will ensure your business runs reliably, efficiently and profitably.


It goes without saying that you should consider the reputation of the Franchisor’s brand when you are considering making an investment in a franchise business. You want to look for people talking positively about the brand online and, within your personal networks.

If the franchise you are considering for purchase has been previously operated by another franchisee, or is being bought out by your Franchisor, then the current reputation of the business should be a key consideration. Check out online reviews and make an incognito visit to the business to assess the current state for yourself. You may even like to strike up a conversation with another customer about their experiences and observe the way the customer service staff are interacting. It’s important to remember that many people are more inclined to talk about negative experiences than positive ones, so seek out the gold and look at the negative with an objective mindset.

Once you’re in the business you can then implement practical ways to let customers know the business is under new management, like an ‘Under New Management’ banner or, email communications (generally with the approval of the Franchisor, following their processes).

No matter how the business is performing when you take over, your goal should be to grow the business and lead your team with a customer-first attitude.


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Topics:   Franchise Business

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