The acquisition of a franchise system offers many advantages. But here too the same rules as other entrepreneurs. Here are ten tips to help you with your franchise start-up success.
Tip 1: Beware of black sheep
Also in the franchising industry, there are black sheep. This includes providers that excessive license fees. Compare the fees so that similar or more suppliers in the same segment. Please exercise caution in terms such as “above average returns”, “bomb-proof” or “guaranteed revenue”.
Tip 2: Check yourself
Franchises offer compared to free up an established brand and a proven concept. Nevertheless, also runs such a company does not by itself. You should have the necessary entrepreneurial qualities and stand behind your product.
Tip 3: Compare providers
Compare different franchisors in your industry. Ask for documents and information. Be careful how quickly the franchisor and how the documents are processed.
Tip 4: Test the concept
In franchising, you can test a concept in advance. Visit a company of your chosen franchise concept in a different location. Pay attention to the establishment, the offer and the customers.
Tip 5: Note the area of protection
Reputable franchisors are not interested in a distribution fight. Therefore, franchisees generally receive exclusive distribution rights in a defined territory. Look around: Is there already a number of providers in your desired area, the market is divided.
Tip 6: Check the provider
Franchisor of the German Franchise Association will be reviewed separately from admission and at regular intervals. This certification granted a degree of certainty as to the seriousness of the offer. In younger, but still interesting concepts you should talk to the competent board consultation.
Tip 7: Do market research
Many franchisors provide figures out through various regions in Germany. But will you also help themselves. Who can judge your area better than you? They ultimately bear the risk.
Tip 8: Make reserves
Although established franchise concepts are often a plus in an interview with the bank: A little additional capital will help – for example, 25 percent of all start-up costs. For costs you have to estimate not only for office space, equipment and the first product, but also for the license fee. This can be up to 90,000 €.
Tip 9: Back up the first financing
Wait for the confirmation of a loan off before you sign a contract with the franchisor. The fact is binding.
Tip 10: Do you have an entrepreneurial
Your project must hand and foot. These include a good business plan and solid advice from chambers, lawyers or accountants. Also check your suitability for the founder and ask yourself: Are you willing to work for little money and leave a lot? Can you take personal responsibility – even if the turnover in the initial phase once is not enough for the salaries?
10 simple tips to start franchise start up process