You probably want to be your own boss and exploring options to buy a franchise in Pakistan. Good choice! But there are several key steps that one must consider before going into Franchise ownership.Typically, Many people think that to own a franchise, you just search for a list of franchises, find out how much they cost, and decide which one to buy.
In reality, a franchise is “awarded” by the company (the Franchisor) to the buyer (the Franchisee). There is an application to submit, due diligence on both sides, criteria to fulfill, and more. You are creating a business relationship – often for 10 years or more – so this is not be taken lightly.
Scope out Franchises
To start, you have to Scope out Franchises. Determine;
- What kind of franchise you want to buy? A Business Format Franchise or Product Franchise
- Narrow your search to just a few choices such as casual dining franchise, automotive franchise, cleaning franchise, healthcare, Beauty, Bakery & Café Franchise, Kids Franchise, Retail franchise or School Franchise.
- Prepare your list of franchise businesses within each category:
- Further refine your list through extant franchises / New Models. International versus Domestic
Now it gets fun. You get to explore in detail the industry, the company, its business and Franchise model. Be sure to research potential franchise thoroughly before deciding to invest. Consider the following questions;
Questions to Consider
- What type of franchise is it?
Make sure you fully understand the nature of the business and how the franchise works, including what locations or territories are being offered, how many other franchises exist, and the level of competition.
- Who is the franchisor & its role?
Research the background of the franchisor. This may include how long they have been in business, financially sound? How many franchisees they have nationwide and the worldwide and whether they’re a member of any Franchise Association. Also look upon their accounts if pubic limited.
- What Costs are involved?
Know how much the franchise costs and what you get for that investment. What are Initial Franchise Fees, Territory / Development Fees, ongoing Fees (Royalty, Advertising, Marketing, Store opening) Business set up Cost, administration and working capital you need to operate.
- What Training & support will you get?
One of the most attractive aspects of buying a franchise is buying into an established business but you’ll only benefit from this if the franchisor provides both initial and ongoing support. Find out what training you’ll receive and what support is offered to help you set up and run your franchise business.
- What are the trading rules and restrictions?
Establish how long the franchise agreement will run and whether you can renew after this time. What restrictions are in place for operating the business, such as pricing, suppliers and equipment? What happens if you decide to sell the business or cannot continue for some reason?
- Role of the Franchisee.
The common practice of franchisors is to impose certain restrictions on how their franchises need to be run. This may include guidelines, standards, Product offerings, Prices, operational hours, store design etc.
So you may be the boss, but the franchisor generally has the control. If you’re not comfortable with this kind of arrangement, then running a franchise may not be what you’re looking for.
A search for a franchise actually starts with you. Before you even think about vetting different companies and inquiring about opportunities, you need to conduct a self-assessment.
- Are you looking for an office-based, home-based, or retail-based business?
- Do you want consistent 9-to-5 hours, or are you flexible?
- How much time can you commit to the business?
- How much capital do you have available for an investment?
- How much can you borrow?
The answers of these questions will help you understand what sort of franchising opportunities you can realistically consider. For example, if you find that you have $150,000 in capital, can work 30 to 35 hours per week, and want a home-based business, you probably aren’t going to be the next Planet Fitness franchisee. All you’d be doing is setting yourself up for failure. On the other hand, there may be a franchise model out there that meets your criteria and would allow you to thrive.
Franchise Due Diligence
Keep in mind that while you are evaluating how a particular franchise concept fits your needs, the Franchisor is comparing you to their “ideal candidate” profile. Once you find a Franchise Concept that Fits;
- Submit Request for Consideration/Application
- Review Franchise Disclosure Document (FDD)
- Training and Support Overview
- Examine the Paperwork
- Celebration or Discovery Day
- Franchisee Interview
- Signing of Franchise AGREEMENT
- Be Willing to Work Hard
When it’s all said and done, you have to be willing to work hard. If you think you’re buying into a franchise so that you can sit on your rear and boss people around all day, while bringing in a fat check at the end of each month, you’re totally misinformed.
While franchises can be incredibly profitable business ventures, Thankfully, there are plenty of success stories out there about entrepreneurs who have found tremendous success with franchising. Could you be the NEXT ONE?
Speak To an Expert
To learn more about the available franchise opportunities, the franchise business model, and how it may fit with your goals, skill set and lifestyle, complete our online Franchise Request Form as an investor and a franchise consultant in your community will reach out to you to discuss the next steps.Hot Franchise of Today