See 10 questions that the entrepreneur should ask before opening franchise
Investing in a franchise can be the alternative for entrepreneurs seeking to open a business. However, industry experts say, before putting money into a particular brand, we need to clarify a number of questions with the franchisor.
1. What is the total investment required for the opening of business?
According to Vecchi, the entrepreneur should ask about all the costs for the opening of the franchise, from commercial property, equipment, facilities, inventory, operating expenses, franchise fee and working capital. "Any amount more can impact on return on investment, when it does not prevent the installation business," he says.
According to Rizzo, the money to invest should be at hand. "Do not believe that you will get [money] after and if not, will the debt to family and friends. Banks only in exceptional cases and not even think about getting into debt deal," he says.
2. What is the average monthly revenue and net profit margin of the franchisee?
Vecchi says the entrepreneur should ask about the monthly average income that the franchise offers and what the net profit margin business. Thus, according to him, can you evaluate the profitability of the franchise. According to ABF, profit ranges from 10% to 15% of revenue.
Above that, the applicant should ask the franchisor by the margin it is higher than the market average.
3. What is the duration of the contract and the rules for renewal?
According to Vecchi, the agreement between franchise and franchisee is renewed every five years. Within this period, the entrepreneur must recover the investment and still make money. You have to check also how they will be renewed. "There are networks that charge all open rates again, others that give discounts and also those that do not charge anything."
According to him, despite the renewal is established by contract, hardly a franchise takes the unity of a franchisee. "There are few cases. This occurs only when the unit can not the result expected by the network."
4. How long can recover the initial investment?
ABF works with the period of return of 18 to 24 months to microfranquias, requiring low investment, and 36 months for franchises that need to improve. "However, the applicant must be aware that every operation has risks and that his dedication to the business can bring a faster return," says Friedheim.
5. What is the desired profile for the franchisee?
Overall, franchises look for people who have an affinity with the area of operation and willingness to lead the unit. However, Rizzo says it is necessary that the entrepreneur make a self-analysis of their skills.
"Think the next five years you must be present in the company every day. Worse than a bad job is a business with which you do not identify," he says.
6. What is the support offered by the network?
According Friedheim, the entrepreneur should ask how the franchisor's knowledge will be passed on to it. The director of international relations of ABF says it's important to know which books will be delivered to the franchisee, as the matrix monitor the unit's goals and how to act to assist in any operational troubleshooting.
7. What is the franchisee training time?
Depending on the complexity of the business, minimal training time is 30 days, according to Vecchi. For those who have had experience in a business similar to the franchise, less than that is not enough to learn all the operating and business processes management, nor give conditions to the franchisee to train and develop their staff.
8. What are the characteristics of the ideal commercial point?
The point of sales is one of the key success factors of a franchise, according to Friedheim. According to him, one should assess whether in the city or region of interest there are locations that meet the requirements set by the franchisor, as flow of people, public profile, income etc.
Also, you need to check for exclusive territory and who is the preference for the opening of a second unit in the same region.
9. The other franchisees of the network are satisfied?
According Friedheim, satisfied or over a network drive franchisees are good indicators of the success of the franchise. However, discontent or high number of units of closing are bad signs.
"Before taking any decision, talk to current franchisees and also with those who closed their business doors," he says. By law, the deductible is required to deliver a list with name, phone and address these franchisees.
10. How long has the franchise been in business?
The longer the franchise has market, the lower the risk of the investment, according to Rizzo. The consultant says also that a network takes three years to reach maturity. "In this weather, you can test the business model, its performance in the market and how to face periods of high and low consumption.
Nenhum comentário:
Postar um comentário