The franchising concept promises the newly founded franchisee a strong start into the market and good growth opportunities. By adapting the mechanisms, strategies and product selection of the franchisor, one can effectively save on own capacities, in addition to the newly established franchise enterprise profits from the already existing popularity level of the franchise network. But not every franchisor who offers licensing offers is automatically the ideal partner for a rapid business success. Read in this Engel & Völkers article why you should consider its success when choosing a franchisor and how you can make an informed assessment.
Franchisors are not all the same: Pay attention to risk factors
In principle, any company intending to expand may set up a franchise system to grant franchisee partner licenses. But this fact alone makes the system by far not yet worthy of cooperation. Depending on the situation and intent of the franchisor, a partnership in question can result in immense financial damage to you as a franchisee. For example, if the franchisor is in an economically precarious situation or is close to bankruptcy, the future of any franchisee operation would result in bankruptcy filing. But even beyond such extreme examples, it is important to closely monitor the economic success of a franchise system in which you intend to invest. After all, your franchise business should benefit from the partnership and enrich your business, rather than hampering its progress. The understanding of the franchisor's success may vary, but it is important that you identify a potential that will benefit you and your franchise investment.