How to Ensure Investment?

Currently, there has been an increase in commercial and legal agreements between a franchisor and a franchisee. Some have been surprisingly successful, while others have been able to survive little by little.

These results may depend on the type of product and / or services offered, on the way the franchise is managed, among other aspects that are key when a business needs to be productive. Two different views of the same coin.

But despite the supposedly negative aspects that may arise in some cases, the purchase of shares is becoming more popular among entrepreneurs. However, there is an important question that everyone asks:

How to ensure that we select profitable franchises for our business project?

A question that must be analyzed to answer. Some specialists and scholars on the subject of franchises in the international market, say that identifying profitable franchises depends, without a doubt, on a thorough analysis and evaluation.

4 Steps to Select Profitable Franchises

Remember, again, that there is no written formula for success. Although when it comes to profitable franchises, some experts say that McDonald’s is the shotgun, that is, the guaranteed success.

However, like any other type of investment, franchises will always present risks. Even, depending on the lower percentage of risk that is calculated, the higher the cost of the franchise.

If you want to know more about this topic, I recommend you read the article Investment strategies for micro entrepreneurs, which refers to the series of tools that are implemented to ensure the selection of the best and highest performing stocks. This choice is made according to the term in which the investment strategies are configured.

Know the Business Plan

When selecting a franchise, first of all, it is recommended that you make sure that, in effect, the franchisor's business vision is similar to yours, in your role as franchisee. That will allow you to grow as an entrepreneur.

Keep in mind that in the Business Plan you will find everything related to the business: its objectives, goals, strategies, human, material, financial and technological resources. This way you will really know what it is about and the perspectives it has and what it could have in the medium and long term.

To deepen your knowledge of what is established in a Business Plan, analyze the content of the report 10 Commandments to write a Business Plan.

By the way, I recommend that you do not get bogged down with a single option or the first one you find on the market. While it is true that we must fall in love with the project, blind love is not recommended as far as investments are concerned. And much less if we are looking for profitable franchises.

Market Plan

Analyze the Financial Model

On the other hand, you must make sure that you can comply with the guidelines specified in the commercial and legal agreement. It is essential to have availability for the capital investment that is necessary; as well as credits, in case of contingency before possible eventualities.

Also, you should know what benefits does the investment provide? This is the moment when we take out the calculator and begin to render accounts and analyze balance sheets to know how reliable these profitable franchises can be.

How is the return on an investment calculated? I recommend this article. There is the information.

In addition, another strong point that you should analyze is the Cash Flow of the franchise you want to acquire. Keep in mind that the prosperity of the establishment may vary, according to its location.

Profitable Franchises How to ensure investment?

Legal analysis

Another important point is the laws that govern franchisers and franchisees in your country. On this subject, Wikipedia provides an excellent summary about the legal process of franchisees in countries such as Spain, Argentina and Mexico.

Remember that in order to consolidate solid business foundations, you must know your responsibilities and fulfill your commitments; as well as your rights and duties. Also, the reputation of a good entrepreneur is something that cannot be played with.

Market study

It is about thoroughly analyzing how and where will be the place where you install your franchise. It should be a central environment for customers, suppliers and, even for the competition, which in the end will be your thermometer to measure sales, demand and preference levels.

That is, the location of the premises and the type of franchise you want to develop, will directly determine the impact you have on consumers and how the communication channels will be with them.