Entrepreneurs invest in franchises for a number of reasons, but one of the most compelling is the promise of financial success. Unfortunately, finding a franchise that provides a rapid and exponential return on your investment is easier said than done.
Explore seven ways to maximize the return on your franchise investment and ensure the profits you’re seeking.
1. Set Reasonable Expectations
Before you jump into franchise ownership, you need to set reasonable expectations for your future as a business owner. While it would be nice to make your investment back overnight, that’s obviously not a real possibility. Talk to the brands with which you’re interested in partnering, and find out how quickly their franchise owners typically begin to turn a profit. Then ask yourself if you could wait that long to reap the benefits of an investment. Set expectations that are reasonable and attainable. Doing so provides a steady foundation for selecting a brand and maximizing your franchise ROI.
2. Partner With An Established Brand
The longer a brand has been in business, the better. Choosing the right franchise has a lot to do with identifying the best franchisor relationship. A smart investment often begins with partnering with an established brand. Franchisors that have been in business a long time have the process down to a science. They know the ins and outs of the challenges you’ll face, and they’re able to streamline your journey toward profitability.
3. Set Your Sights On A Growing Industry
Buying a Blockbuster franchise in 2012 probably wouldn’t have been the best idea. The company was out of business the following year. That’s one example of why knowing your industry and the projections for its future stability is crucial. When you’re in search of the best franchise investment, look to industry statistics and success rates for guidance. For instance, you’ll probably get a higher return on your investment in a health and wellness franchise – as this idustry has surpassed $3 trillion globally and continues to grow – than you would for a franchise in a declining market.
4. Choose The Right Franchise Model
When you’re in initial investment talks with franchisors, make sure you’re getting a full and fleshed-out picture of their franchise model. This is the basis for all your future successes (and failures). Look for one that provides the perfect balance between franchisee support and autonomy to run your business. A franchise model that enables profitability and is easy to understand is worth your investment.
5. Open Shop In A Lucrative Location
Few choices regarding opening a franchise are as important as choosing the right location for your business. There are many factors that impact this selection, like the surrounding market, the appeal of your products to local consumers, even the proximity to your own residence. All of these elements must be taken into account when you’re finding the perfect spot for your business. Look to a supportive franchisor for guidance on selecting your storefront in order to secure a promising franchise ROI.
6. Hire Dependable Employees
Once you’ve made your franchise selection, it’s time to hire valuable employees that give your franchise the stability it needs. Turnover is a costly enterprise for owners, so you want to find people who are reliable and dedicated to your business. To maximize the profitability of your location, you should seek out a team of individuals who work hard, are focused on productivity and display the skills to keep your location running smoothly.
7. Verify The Quality Of The Products
You’ll never see a return on your franchise investment if you’re offering subpar products and services. Before you make the huge decision to open your own business, you should first ensure that the products you’re selling are of high quality and in demand. Identify offerings that consumers already have a need for and that sell year-round, not seasonally. The best products and services sell themselves, so put a lot of thought and consideration into what you’ll be working with before you invest.
To learn more about a franchise model that maximizes ROI, take our free franchise ownership e-tour.