Investing In a Franchise - Evaluating Your Choices
Numbers aren't all that will tell you if a company is successful or not; while profits
and sales matter a lot, what matters even more is how you're getting them and if you can sustain them in the years to come. The company and the management matter; the more efficient and experienced the management is the more secure is the business setup.
What industry does the company operate in? Has it been following the same growth rate as the rest of the industry or has it been showing accelerated or decelerated growth? If it's been growing slower than the rest of the industry then it's risky and possibly not profitable. What matters is how much business franchise opportunities grow in an economic downturn.
Are you opening a store in the right place? The franchisor will normally grill you on how well you can manage the business, your level of commitment and your understanding of risks and profits associated with it but what you need to ask yourself is are you opening the right store or outlet in the right place, there may be multiple franchise opportunities in USA but are they all reasonably successful?. Does the demographic that the company targets, exist in the area or not?
How well established is the brand? Both in the market and relative to the industry. Are there similar products like it in the market and who is the market leader? How far behind is the company from the market leader and what differences do you perceive in the products? Is the product unique? The more unique the product the better the sales are likely to be. Fresh fruit arrangements and fruit bouquets are an excellent franchise opportunity; they're unique and have shown exponential growth in the past years.
Investing In a Franchise - Evaluating Your Choices