What is a franchise model?
Definition of Business franchise model is where a corporation aids a business owner who wishes to buy the corporation’s rights to use its brand. In return, the corporation charges the owner fees or percentage from the sales of units.
Is owning a franchise profitable?
Owning a franchise can be profitable, but that depends on many factors, like:
-
The popularity of the brand
-
Marketing efforts of products by the business owner
-
The location of the franchise
-
Franchise with low start-up costs etc.
For example, if you are looking to set up a franchise of a school, it is vital that you choose the location wisely like a residential area with no other schools in the proximity of at least 3-4 km.
Who owns the business in a franchise?
In a franchise business, the owner of the business is a Franchisee who has bought the rights to the business logo, name, and model of the Franchisor.
Factors to keep in mind to choose the best franchise opportunities in 2020 are:
If you are looking for franchise business opportunities in 2020, then choosing the right franchise is very important, the following factors will help you do so:
-
Conduct market research on the franchises you are targeting – their profits, product or service quality and reputation
-
Choose low cost franchises with high profit
-
Look at the revenue model of the Franchisor and their experience
-
Calculate the initial investment like office or shop lease, hiring employees, salaries of employees, maintenance of the property, etc.
-
It is important to know the ratio of your initial investment against the rate of return or revenue or income generation
-
Analyze your future competitors
-
Weigh whether the franchise will be able to give you returns within 2 years of initial investment
-
Create a 5 year projected growth forecast to access where the Franchisor’s business plans and marketing efforts will really materialize
-
Understand and read the terms and conditions laid out by the Franchisor
-
Make sure the Franchisee has an option for you to exit in case you have to close down the franchise business for any reason
For a Franchisee, it is also important to know if the Franchisor agreement gives them litigation right. It is advisable that any owner who thinking about acquiring a Franchise, go through a reputed Franchisor who thinks about the future business expansion through the Franchisee.
Alpha InfoLab Inc. is an industry leader in providing IT and Digital Marketing expertise to businesses of all sizes. Speak to our experts today to know how being our Franchisee can help spiral up your business and increase your revenue trajectory.
Commissions Autopilot