Retail franchising is a contractual agreement between a franchisor and a retail business owner. The franchisor can be a manufacturer, wholesaler, owner of a specialized product or service.
The franchise is the one who will operate the franchisor business in his or her locality. The franchise is supposed to run and grow the business under the brand name of the franchisor and as per laid down policies, rules, and terms.
6 Things to Consider before Starting a Retail Franchising Business
Before you finalize the decision to buy a retail franchise offer, there are certain aspects you must clarify with the franchisor.
1. Earning Potential
When you talk to the franchisor, get as much information possible to understand how much you can earn from the venture. Talk to other franchise owners, how much they are earning. Not that everyone will give you similar feedback. You analyze the information received and take a decision on your own
2. System Support
Check whether the company provides tried and tested system support for the daily and overall operation of the store. A reputed brand with some years of experience will surely have tried and tested system processes and tools in running a day to day operations of a retail business. If, however, if you are not satisfied with the processes, check twice before buying the franchise business.
3. Training Support
Training is the most important aspect of growing a franchise business. A reputed franchisor will always have a proper and continuous training support system. You must ask them whether they provide training on-site or at their own premises.
4. Experience of Existing Franchise Business Owners
If possible, talk to other existing franchise owners and take feedbacks of their experience. There will be always a mixed feedback, both positives, and negatives. Take a balanced approach while analyzing the reactions.
5. Actual Cost to Start and Run the Retail Business.
Last but not the least, calculate as specific as possible of cost to be incurred while starting and maintaining a retail franchise business. Take help from your accountant, and verify whether the investment can bring in sufficient return on investment.
6. Retail Location
Location of the retail store is the most important factor in running a profitable retail based business. It is advised to find an appropriate retail location as per the product. Talk to the franchisor what kind of retail place is ideal for the distribution of their products.
As a result, more new players are coming into the retail sphere. Find here a list of top Indian companies offering retail franchise opportunities.
Editorial Staff at NextWhatBusiness is a team of Business Consultants having years of experience in small and medium scale businesses.