Considering franchising your business then do your home work first!
Considering franchising your business then do your home work first!
If you are considering franchising your business model I would recommend that you first research and make yourself well aware of any potential threats that lay out there waiting for you that could cause you and your business
severe problems particularly during the early stages of trying to get your franchise business established in the franchise market place.
Some of the main threats as I see them that could cause your new franchise business to stutter or totally collapse around your feet before it as even got off the ground are as follows: -
Have you priced your franchise model at a cost effective but competitive rate?
Continuing growth of existing franchise business competitors.
As well as your business there may well also be a continuing stream of other new franchise business competitors entering into your chosen market place.
A large quantity of independent small companies already trading in your market place might well make your franchise less appealing to potential franchisees.
Low rates of unemployment could mean a limited amount of new entrepreneurs looking for franchise business opportunities.
There are many other potential threats that exist those that I have outlined above are only the tip of the iceberg, please feel free to contribute to my list with any potential threats that you might be aware of that may threaten someone trying to get their new franchise business model off the ground.
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December 24th, 2008 at 1:40 am
You did a great job of touching on some of the issues when considering franchising. It is important to note, that depending on the business area / model, existence of some competition can actually benefit a new franchisee by providing validation of the benefits of the business. However, it increases the need to differentiate the new business over existing competitors.
December 24th, 2008 at 8:37 pm
Radi,
Thank you very much.
In the present financial climate it is also very important to investigate what effect the economic down turn is having on the type of business that you are considering.
Robin