Things to Remember When Starting A Franchise Business

The franchise industry is a wonderful opportunity for many entrepreneurs to start their own entrepreneurial activity. But here are some things that they should keep in mind when starting their first franchise.

Becoming a franchisee can prove to be an extremely profitable investment thanks to numerous advantages associated with it. It is this aspect of franchising that generates a great deal of interest among potential investors. In the same breath, the flip side must be taken into account as well, as every opportunity comes with its share of risks. Although one could name a wide variety of risks, there are three in particular that must be given more attention than others.

Although it may seem redundant at times, location remains one of the largest risks associated with any potential franchise. A franchise of a furniture department store may have had success in many regions and a solid business model, but if placed in a rural environment far outside the city center, the prospects of a great return are significantly lower. Certain franchises are more suitable for a wide variation of locations than others, and it really comes down to the demand, as well as the industry the franchise operates in. With that being said, location will always be a paramount decision, as getting it wrong could make all the difference in how profitable it turns out to be.

In addition to location, regulations in the region that is selected are another aspect that needs to be examined meticulously. There are many laws in place that franchises need to follow, and failure to do so could bring upon closure when these guidelines are ignored. Being in compliance with all governmental laws are essential in navigating through this, especially when it is a new location in a foreign country. While this may require a more attentive look at the paperwork as well as more conversations with local authorities, it is an essential step in maintaining a franchise.

The third essential risk to take into account is capital risks associated with it. As with any business, a franchise will require a large monetary investment on the part of the franchisee in many cases. This is an area of franchising that is also very dependent on what the ultimate goal is. If the goal is to grow and expand within a certain region, that will more than likely demand a more substantial investment. In order to fully understand the capital risk for a franchisee, a broad financial picture is often needed. Whether that is through examining the franchise disclosure document (FDD) or hiring an accountant to assist in analyzing financial records, it is an essential step to take before making such a large investment.

Aside from the risks, franchising still bodes a great opportunity for many onlooking investors. Most franchisors, such as MBE, will also try their best to mitigate and work through these risks. Franchisors understand that the beginning steps for a new franchisee can be challenging, and that is why many of them offer a variety of tools and training. When it is all said and done, this type of business is always going to take a commitment from the investor, and the major risks of location, regulations, and capital risks are quite simply challenges that must be addressed.

Becoming a Master Licensee with MBE

At MBE, there is already a prominence of MBE Master Franchisees in more than 45 countries. Proving MBE is a safe and successful business concept for Franchisees al over the world thus opening a window of possibility for investors in many countries to start their master franchise with MBE.

To learn more about the opportunity, please fill out the form and we will provide you with more details on available opportunities.

  • * All fields are mandatory

    to the processing of my personal data by MBE Worldwide S.p.A. for marketing purposes as better described in para. 3, lit. c. of the above-mentioned privacy notice.