Tips on choosing the right franchise

More and more people are considering the option of owning a franchise. However, a great deal of thought and consideration should go into choosing the ideal franchise.

"Deciding to open a franchise is great but potential franchisees need to do research on the franchise industry before taking the actual steps to open one. Before going down the path of opening a franchise, franchisees need to decide if this is the right move for them," says Morne Cronje, Head of Franchising FNB.

Often we overlook certain factors that are crucial to the success or downfall of businesses. Cronje suggests that we look at the following factors when choosing a franchise:

  • Decide on which business sector you would like to operate in - select a sector that you enjoy working in and investigate the potential growth and whether it will be sustainable in the long run. Once you have narrowed down the most suitable industry, analyse the geographical area in which you want to operate and determine whether there is a market for the type of business.

"There are various tools available to you to undertake the research process. Websites such as is an invaluable source of information and provides the ideal platform to conduct a comparative study of franchise opportunities offered," says Cronje.

  • Speak to Franchisees - Try to spend at least one day with a franchisee. This is the only way you can get an accurate idea of how franchisees spend their time and what they are doing to make them successful. In this way you can build a relationship with the franchisee which will allow you to get more honest and detailed questions. When speaking to franchisees look at:

    • How well prepared were they when the franchise was opened? If a franchise experienced unpleasant surprises and unexpected problems it normally points to weaknesses in the support received from the franchisor. It could also reflect on the thoroughness of the franchisor's training programme.

    • Do the marketing programmes generate customers? Many franchisors will tell you about the brand building that is done through the various marketing programmes. However, what is important is whether these campaigns bring customers through your doors that will spend money in your outlet.

    • Finances. Find out as many financial details from franchisees as you can. You need to know how much it really costs to open a unit, how soon you will start making money, etc. You will only be able to get the real picture by speaking to franchisees.

Tips on choosing the right franchise


  • Ask questions - Franchisors may try to amaze you with their glossy brochures and slick presentations. You are entitled to ask the franchisees questions. Three very important questions to ask:

    • What is your company's primary focus?

    • What the reasons for franchisees getting in trouble?

    • How do you resolve conflicts?

  • Where should my business be located - Unless the franchisor has identified a site, you will need to start looking for premises. But even if the franchisor offers you a site, you should still do an in-depth investigation. Try and locate your business within the community where you are known – it helps with networking. Check out the site with respect to size and affordability, access to utilities and security, proximity to your target market, visibility and availability of parking. The location of competitors is another important consideration.

  • Compile a business plan - Your business plan is a set of business goals. It contains goals that are attainable, and the plan for reaching those goals. It may also contain background information about the organization or team attempting to reach those goals.

  • Funding - pproach your bank for funding. FNB Franchising provides franchisees with financial and operational tools that are designed to accelerate and support the growth of your business. This in turn provides you with the convenience, advice and flexibility to manage your business more effectively and efficiently.

Knowing and understanding the franchise industry is vital to the success of any brand. "International influence is also creating a positive impact in the franchise industry. South Africa is a growing and sustainable economy that is thriving on investment opportunities, that not only contribute to our economy but also create jobs and benefits tourism," concludes Cronje.

Source of Article: FNB