How To Choose The Right Franchise

Factors to Consider When Selecting a Franchisor to Invest With

As a franchise operator, when getting ready to start your franchise, the most important step is vetting prospective franchisors and choosing one that offers you the most benefits. This, however, can be a difficult process if you don’t have a lot of experience with franchises and aren’t sure what to look for in a franchise partner.
In this article, we will provide all of the information you need to pick the right franchise while explaining what you should be looking for in a franchise agreement.

What Does it Mean to Be a Franchisee?

As a franchisee, you will own and operate your business but must do so under the name and branding of the franchisor. You must also follow the franchisor’s systems and guidelines, and pay them a franchise fee and ongoing royalty fees. In exchange, you get to capitalize on the brand’s existing brand awareness and will be provided with training and ongoing support from the franchisor.

The amount of support and training you receive, along with the required fees, recommendations and guidelines, and any other requirements you must follow will be outlined in what’s known as a franchise agreement.

What Makes a Great Franchise From a Franchisee’s Perspective

When reviewing the franchise agreement with your franchise lawyer, there are certain indicators that the franchisor may or may not be a great franchise to invest in. We will explain what you should be looking for in a franchisor below.

Lots of Onsite Training and Support

Look for a franchisor that will do whatever it takes to help your business succeed. From mentoring to unlimited phone or video calls and onsite training at your franchise location, you should only invest in a franchise that is willing to invest in you.
The franchisor should always provide in-classroom, onsite, and virtual training that lasts at least one to four weeks and covers the following topics:

Choosing the perfect location
Setting up operations
Hiring and training employees
Standards and procedures that need to be followed
The franchise’s branding and merchandising
Customer service
Marketing and advertising
Sales procedures
And more

They Have a Strong Marketing Plan

A great franchise understands the importance of advertising and marketing. A sign of a great franchisor is high-quality advertising campaigns and marketing materials, such as television commercials, online video ads, and social media campaigns.
A franchisor should also share its marketing and advertising plans and guidelines with each of its franchisees so they can successfully market their business.

Reasonable Fees

All franchisors require their franchise operators to pay two different fees: a franchise fee and royalty fee.
A franchise fee is paid at the beginning of each franchise term. You will only need to pay this fee at the beginning of your relationship with the franchisor and when you renew your franchise agreement and start a new term. Franchise terms typically last between five and 20 years, while franchise fees often range between $10,000 to $100,000.
Royalty fees are different from franchise fees in that they are paid out on an ongoing basis. Typically, royalty fees are paid to the franchisor weekly, monthly, or quarterly. The amount that the franchise operator is required to pay is determined by taking a percentage of their gross sales. This percentage typically ranges between 4% and 12%.

When reviewing different franchisors, look for one that has fees that you can easily afford based on your projected profits. If a franchisor requires you to pay exceptionally high fees, look at what you will get from the franchisor in exchange. If the franchisor has high fees but offers minimal training and support, this is a red flag.

They Thoroughly Vet All Their Franchisees

A successful franchisor will be highly selective when it comes to approving new franchisees because they want to ensure that all new businesses using their name and branding will be successful and not tarnish their reputation.

Typically, a franchisor will look for franchisees that can prove the following:

They have the financial means to start and run a business
They have strong business acumen
Making a lot of money isn’t their sole priority and focus
They are passionate about the line of business
They are willing to maintain your standards to ensure continuity
Overall, they are a good fit for the franchise

The Franchise’s History

Always look at a franchisor’s track record before agreeing to invest in its brand. Look at how many locations the franchise has and how many of those have reported high profits and have been in business for more than five years.
Also, look at:

How the franchisor treats its franchise operators
Have they been involved in lots of litigation?
How many years the franchisor has been in business for

You Are Passionate About the Franchisor’s Line of Business

When starting your own business, it’s so important to choose a franchise you are interested in and passionate about. While making money may be your top priority when starting a business, it’s so important to be your franchise’s spokesperson and biggest cheerleader. If you are not passionate about what you do, it will reflect poorly on your business.

So, if you have no interest in the food services industry, investing in a restaurant franchise may not be the best move for you. But if you are passionate about helping people and providing an essential service, you may want to consider a franchise like Gorilla Bins that provides waste disposal services.

Why Gorilla Bins is Ontario’s Best Franchise For New Franchisees

If you are considering investing in a franchise but haven’t yet found the right franchisor to invest in, consider partnering with Gorilla Bins.

Gorilla Bins is Ontario’s leading waste management franchisor with several locations across the Greater Toronto Area.
Gorilla Bins offers its franchisees lots of training and support to help them be successful. We also have a track record of producing successful franchisees and have tripled our revenue over the past five years.
Get in touch with our team today to learn more about Gorilla Bins and how we can help set your franchise up for success.