Before entering into a franchising, you would have surely asked the question, “how successful really is franchising?” You must have heard stories of companies franchising a business and going national. You have researched about whether it could be a good (read lucrative) decision. Maybe you have even wondered how wise taking that next step is.

Is it something every business eventually considers? And even if it is… does that mean it is the right move for your business?Franchising is a big move and even a bigger opportunity, and it is important to consider every angle of the decision before making one, and it is certainly important to have all the facts.As a franchisor, there are plenty of questions that might cross your mind. So, what is the best choice for you. There are some key areas that you should review before taking this journey of franchising:

Demand: As is the case before starting any new business, find out if there is a demand for the product or service you intend to offer. If you are buying an overseas franchising license, be wary that what sells well in other countries may not be equally well received here. So don’t jump on the opportunity without doing your research. The potential for expansion should also be considered if you intend to branch out to multiple outlets in the future. You have to check the consumer demand for the franchisor’s product or service. Considering if there is a strong consumer demand for it? Is the demand expected to continue? Are there many competitors? Could more competitors enter the market in the next few years? Is the product or service of outstanding quality & if you are confident you can market the franchisor’s product.

Track Record: Just because a company offers franchising opportunities doesn’t mean it’s worth taking up. You should only look at the companies that have proven themselves successful at franchising their business. The franchisor’s business track record should also be checked thoroughly. You should know what is the story of the franchisor’s business record and reputation. You should also be aware of that whether the franchisor is financially strong and stable .You should speak to the existing franchisees about their experience so you get a clear idea of whether the franchise is worth investing in. They can give you insights you won’t find anywhere else.

Competition: If the franchise is a well known brand, there may already be lots of franchisees acting in the vicinity, and not to mention other rival companies. Consider first if the franchise and industry you’re choosing is a strategic business to enter as it’ll be hard to establish yourself if there are many competitors in that market. If the product being sold is unique then competition will not be an issue. But for most businesses, this will not be the case.

Training: A major advantage of franchising is the training and support offered to franchisees. If you don’t have any entrepreneurial experience, then it is advisable to choose a franchise that offers substantial training. Some even provide on-going support even after your franchise is up and running. With proper guidance and training, the chances of your franchise being successful right from the start will increase greatly.

Restrictions: It is very common for franchisors to impose certain restrictions on how their franchisees are to be run. They usually require franchisees to follow guidelines and standards which may encompass things such as product offerings, prices, operational hours and store design among others. So you may be the boss but franchisor generally has the control. If you are not comfortable with this kind of arrangement, then running a franchise may not be what you are looking for.

Consider the latest trends: You don’t want to invest in a fad, but you do want to invest in a franchise that’s current and relevant. So research what consumers want and need and take a look at what products and services are lacking in your community.

Research the franchise business model: Unlike with an established franchise, a new franchise’s business model may not yet be fine-tuned. You don’t want to invest in a business model that you don’t understand or will make it harder for you to succeed.

The return on your investment is not as certain: When investing in an established system, you can talk to existing franchisees and get financial figures from franchisors in order to get an idea of what to expect in the beginning. Investing in a new franchise, however, is more of a guessing game. Since there are few locations, it is difficult to get a feel for the real depth or scope of the financial opportunity. Often, the only historical financial data available is from a single, corporate owned unit.

The concept of the franchise that you are venturing into should be well defined. Give importance to the question “How is the franchisor making money?” It is tough to make a blanket statement about which franchise system is more viable.

Although logic suggests that a well established franchise with many locations would be the safest choice, but, brand name and number of locations doesn’t guarantee success. At the same time disqualifying a new franchise system for the sole reason that it is new, might cause you to miss out that perfectly suited investment opportunity that would have been an unequivocal financial success. Still new franchise concepts can be risky. So before being a franchisee, let’s hope that you have evaluated the franchise system and satisfied all the key areas that will keep you dancing in the system that you have chosen.