Friday 8 November 2013

Franchising for 2014? Yes or No?


I’ve had some people ask me about the feasibility of franchising for an investment in the upcoming year. This 2013 had played its toll on the European economy. The Euro zone crisis took the most highlight with the property bubble bursting and the currency’s value dropping. Everyone has smaller capital to start with. So is franchising a feasible solution? 


1.    Franchiser’s Health
Many strong fastfood and restaurant chains still remain strong especially in the corporate areas of many countries. However, those that gain greater recognition from consumers are the ones that present something unique, and most of these are small businesses. Now small businesses are likely higher risk investments, but they’re innovative. If you haven’t taken a risk with your investment for quite a while, asking the small business for franchising could open up great opportunities.

2.    Franchise Fees
The only downside to franchising is that you will really have to pay higher franchise fees. Resources, establishment and training fees are rising because of competitiveness and a proprietor will need to scrounge up some high capital. As for returns, refer to number one.

3.    Attractiveness
Still, the kind of company you work with will be the basis of your business’ attractiveness to audiences. Targeting children with kid-themed fastfood could work when you are established in nearby schools or supermalls. However, stay away from standard franchises, such as McDonalds or KFC; they are not as attractive as they once were and more people are leaning to either extreme dishes (giant burgers or fries) or fusion and specialty dishes.