Popular Appeal: How the franchise concept is received by the community is critical. While hamburgers seem to have universal appeal not all food chains meet with majority approval. Also, if your business model is too original, you are in for a struggle. A company may be successful when run by the entrepreneur who dreamed up the concept; however, if the business model or prototype is not easily duplicated, the chances for success are not so certain.
Location: Ask seasoned franchisees to name one of the most important keys to a successful franchise and undoubtedly they will say, “Location, location, location.” Even with a well-branded name, if you are off the beaten path, inconveniently located, or in an isolated area the opportunity to be as lucrative as possible diminishes.
The Marketing Plan: Many well-established and reputable franchisors have marketing and advertising funds into which franchisees contribute monetarily. Many smaller franchise systems require a lot of legwork on behalf of the franchisee. Depending on the business you chose, you may have to solicit your own clients, as in technical and computer support franchises. If you are considering a concept that requires outside sales skills and you lack them, you may want to rethink your choice.
Heavy Competition : There are approximately 160,000 franchises in operation in the U.S. If your market is already saturated with a concept, you may want to consider something that still is popular but not yet tapped out. Here is where considering a new franchise concept can put you ahead of future competition.
Unrealistic Expectations: New franchisees are notorious for having very high expectations for their businesses. It may take two to three years before you see a profit and if you don’t plan for that, you may sink before you have a chance to swim. If you want to succeed, you have to put in long hours and work with all kinds of personalities. It’s an undeniable fact that some people are more difficult to interact with than others. As a business owner you need to be able to interact well with people from all walks of life. The ability to manage employees also is essential to the success of your business.