Four Ways to Tell if a Franchise Opportunity May be Profitable

Four Ways to Tell if a Franchise Opportunity May be Profitable

When researching franchise opportunities, there are a number of factors that can help you determine both the overall health of the franchise, as well as if the opportunity may turn out to be profitable for YOU. Annual revenue for the entire franchise system is a good start, but here are four additional factors to consider as you explore opportunities:

Unit Growth: Check how many units have been added and lost during recent years—information that is readily available on a franchisor’s franchise disclosure document (FDD)—and be sure to ask the franchisor questions around projected future growth to get an overall idea of how the franchise is doing.

Average Sales Per Unit: How much money a franchise can potentially make is an important consideration when determining if an opportunity may be profitable for your situation. Franchisors are not required to disclose average sales per unit, and many choose not to in order to avoid any grounds for false earnings claims. However, item 19 of the franchise disclosure document can give you an idea by disclosing how many outlets are within specified revenue ranges. This information can help you determine how many units are performing in the range that you would like to see for your business.

Franchisee Reviews: What existing franchisees have to say about their franchisor is a telling factor when it comes to making a franchise purchase decision. Finding a franchise with high franchisee satisfaction rates is key and the best source of this information will be the franchisees themselves. During your discovery process, be sure to reach out to numerous current franchisees to discuss their overall satisfaction with the system to determine if there are any red flags to be concerned with.

Ongoing Support: Ongoing support from the franchisor can make the difference between successful franchisees and those that fail. Choosing a franchise with ongoing operational backing—including industry specific training, marketing support, and guidance with issues such as insurance requirements and technology considerations—such as AtWork, will help to ensure that you are well supported.

Making the decision to purchase a franchise is one of the most important that an entrepreneur may make. Exploring the four factors listed above, however, will help you to make an informed decision that is more likely to fit your goals and lifestyle, while also getting you to profitability as quickly as possible.

If you’d like to learn more about the AtWork opportunity, click HERE or call 888-553-1745 today!


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