Over the past three years, the franchising market in Russia, according to the European Franchise Association, has grown by 98%. As of the end of 2011, more than 500 franchisors operate in our country, and more than eight hundred claim to have a franchise program. Obviously, these figures are the result of a low base (in Poland, with a population 3.7 times less than in Russia, there are about 600 franchisors). Most experts agree that high rates development of franchising in the next five years will continue. As a result, competition among franchisors is growing.

In negotiations, I often hear the phrase: "We will sign the contract if you give a guarantee of sale." For a long time I tried to explain to partners that for a broker a lot depends on the franchise itself. It didn't work. Then we analyzed the proposals implemented during the year and developed clear criteria for a commercially successful franchise, according to which we now offer clients to evaluate their project.

Business indicators

Since franchising is copying successful business, then it is fair to single out the indicators of the flagship company as the main block. How long has the franchisor been in the market? How fast is its network growing? Did he manage to fine-tune his own business processes, understand the specifics of the industry and assess the seasonality factor in his business? I am very worried about the trend of launching a franchise program by very young companies. Moreover, now it is not uncommon for a company to announce a franchise without having its own points of sale. This is certainly a negative signal for the investor.

Successful franchisors, as a rule, begin to replicate the business at least a year after the launch of their own outlets. This is preceded by a period of development of a full package of franchise documents, the purpose of which is to secure the franchisor and facilitate the transfer of technology/know-how to the partner. The number of partner outlets opened under the franchise of such companies significantly exceeds the number of closed ones (there may be no more than 15%), because franchising is primarily the minimization of entrepreneurial risks. At the same time, a potential franchisee can easily get contacts of almost all existing partners, ask them questions of interest, learn their impressions of cooperation.

Promotion

When choosing a franchise, investors often pay attention to the quality of federal brand promotion. When the product is already known to the end consumer, having opened a point in his city, the entrepreneur immediately has a pool loyal customers. However, this criterion goes by the wayside, if the franchisor really offers to replicate unique business. In this case, carried away by the bright and original idea The investor turns a blind eye to many things. Typically, such projects initial stage there are practically no competitors, due to this they manage to reach good commercial performance.

The situation is similar with franchises from "scarce" industries. For example, the number of production franchises is critically small and falls short of even 1% in the overall supply structure. At the same time, we have more than 5% of applications for such franchises. Unsatisfied demand makes any more or less established franchise from this industry in demand.

Separately, it is worth highlighting the situation with Moscow and St. Petersburg. More than 90% of franchise companies develop their own network in this territory. Exorbitant rental rates and high salaries nullify the prospects for retail franchises in these cities. Commodity franchising implies that the franchisor's delta earnings are already included in the shipping price, so the franchisor will always earn on the supply, but the franchisee will not - the level of current costs is too high. That is why only the franchising model in the field of Catering and services, when the amount of the franchisor's earnings is tied to the sales volume of the franchisee. Clear and thoughtful proposals from this industry are doomed to success.

Franchise Economics

The economy plays a big role in the success of a franchise. Russian franchising, like business in general, is characterized by short planning horizons - an alarming feature. Entrepreneurs are unsure tomorrow, and therefore franchisors, especially famous brands, wishing to immediately receive a significant part of the funds, unreasonably overestimate the initial contribution. At the same time, the payback period of the project is often underestimated. When we see such a situation, we offer the client to calculate the payback of their own point based on the purchase prices of the franchisee and all necessary deductions. For a commercially successful franchise, this indicator is always not lower than stated in commercial offer. Otherwise, the business simply grows in breadth, without any internal content, and a bubble effect occurs. That is why I am sure that only those franchisors who understand that their competitive advantage in the medium and long term is quality operational management. It does not develop quickly - it is the daily work of a professional team.

What is the best franchise to choose?

The vast majority of experts believe that 2017 will be the year of explosive interest in franchising. Crisis conditions have undoubtedly affected the market, but this is not the end, but the opening of new horizons. If we proceed from the fact that Russia is on the right track, then, most likely, we will see the flourishing of franchising - both from international companies (as the right way gain a foothold in Russia without risk and for a long time), as well as from talented and caring local businessmen.

If right now you are faced with the question of which franchise to choose, then you need to make a choice after evaluating a) your own capabilities and desires, b) trends - both global and local, c) the chosen franchise.

Goods or services - which franchise to choose?

People often ask which franchise is more profitable - goods or services. This question is worth asking yourself, because no statistics reflect the real picture, especially applicable to everyone without exception. This is a reason to think - do you think buying a franchise is such a magic wand and the franchisor good fairy who will do everything for you. You should get rid of such a delusion as soon as possible, otherwise you risk falling for someone who "will explain in a nutshell what the franchise is about." AT best case such " franchise network"fall apart, at worst - you will become a victim of a banal fraud.

You need to choose the direction that attracts you and what you understand. Or not against understanding - but to the subtleties.

You have to like the business. If you have been dreaming of your own beauty salon all your life and are well versed in this area, it is quite risky to get involved, for example, with the sale and installation of septic tanks. It's not even a matter of profitability. autonomous sewerage quite possibly a better deal. But not a single business model, even the most developed and ideal, will provide profit if the businessman has neither motivation nor interest in the chosen type of activity.

The second point, much more mundane - how much money are you willing to invest in this business? Estimated Russian Association franchising, the lower "threshold" in this case is from $ 10,000. This is a minimum, but in the first months, expenses may exceed this amount. If you barely have enough money to pay a lump-sum fee, then you need to once again recall that the turnover that the franchisor means is how much the franchisee receives, who has successfully worked for at least a year, and in compliance with all the requirements of the franchisor. And they can be very, very tough, which will certainly require additional financial injections.

Where exactly is it supposed to work using a franchise?

It is also necessary to take into account the peculiarities of the market - the size of the population, the demand for a product or service, the presence or absence of similar brands, etc.

When analyzing local specifics, focus more on your own experience and common sense. The statistics here are unlikely to give a complete and objective picture. A simple example: according to Yandex search statistics, the same service is searched for in Moscow three to four times more often than in St. Petersburg. It may seem that this service is more popular in the metropolitan area. However, if we recall that 12,377,205 people live in Moscow, and 5,225,690 people live in St. Petersburg. (the difference is about 2.5 times), it turns out that the need for the service, in general, is at the same level.

Choice of the franchisor

One paragraph will not get off here, a special conversation is required. However, in any case, regardless of big name, fame, etc. it is necessary to find out:

• whether the trademark is registered;
• monetary issues, including what exactly explains the size of the lump-sum contribution;
• how old is the company;
• how many franchises have already been sold, how many are open and how many have closed (and for what reasons);
• development plans;
• support schemes;
• requirements for equipment and suppliers;
• a scheme for controlling your work;
• who will provide communication, support, advice, etc.

It is better, again, without relying too much on statistics, to communicate with other franchisees. Are they satisfied with the cooperation, did their hopes come true, does the declared profitability correspond to real incomes, are the agreements, schedules and volumes of deliveries being fulfilled, etc. We dare to note that communication on professional forums is good, but it may not reflect the full picture. It's no secret that "reputation management on the Internet" involves, among other things, the removal or, conversely, the distribution of both positive and negative feedback. It is much more useful to study, for example, the database of lawsuits by the name of your prospective partner, paying attention not to the number of lawsuits, but to what the dispute arose over. No less informative is the study of news resources - both regional and federal.

Which franchises will be a good choice in 2017?

Franchising quite justifiably goes to the Internet and social networks. A completely justified decision: not renting offices allows you to reduce costs, and in order to develop an online business, sometimes it is enough to have the Internet, basic technical skills and the Internet. Outcome: own business in own house. "Home" franchises do not require payment of rent, and it is quite possible to do without staff - according to at least, at first. It is important not to overestimate your strengths and abilities for self-organization, to decide on the field of activity and, of course, choose a conscientious franchisor. The last task is facilitated by the fact that in this area you can find proposals from quite conservative areas - for example, sales of legal and consulting services, public procurement. The rise in popularity of online learning has led to interesting directions- from online tutors to online car instructors.

Of course, in 2017, the active growth of traditional areas - services and catering will continue. Franchises based on love of children and lack of time for raising children are in constant demand. Namely: franchises associated with preschool education and education, developing leisure, active recreation and entertainment for children.

As for retail, the picture is much less rosy, at least for the middle price segment. So if you are interested in this particular segment, then it makes sense to pay attention to economy class products.

The share of franchising in catering is steadily growing: according to some estimates, franchising enterprises account for more than 50% of the total market. The coffee shop sector is growing particularly fast. Despite the fact that the crisis has hit eating out, people do not stop drinking coffee on the go. Coffee shops and fast food are the two segments that show a steady growth, albeit a small one.

Moreover, growth is noticeable both in large cities and regions where local businessmen are expanding the market for their products. In this regard, another trend is interesting: the growth in the number of regional franchises. Opening a franchise business in small towns can be very profitable - the staff is cheaper, the start-up investment is lower, and a considerable number of already built and often empty shopping centers We are ready to offer a profitable rental. Franchising may be popular for small towns medical services and laboratory diagnostics, food delivery, grocery stores, children's goods stores - and, of course, all types and forms of children's recreation, education, development and sports.

Franchise business is becoming more and more relevant, and that is why good reasons. It is noteworthy that this option is chosen by both beginners and experienced entrepreneurs, and this is logical. The first do not want to bother with the development advertising materials, organizational and documentary details, and the latter, in turn, have already "stuffed bumps" in their previous activities and are well aware that it is better to invest your money in a proven business scheme that has been successfully working for many years in a row.

There are a lot of offers on the franchise market today, and in this moment in Russia there are several hundred of them. It is only important to study very carefully what interests you the most, since there are also little-known and sometimes simply absurd ones.

Moreover, we are talking about Moscow, where there is a lot of competition and, perhaps, branches under a certain brand have already been opened. However, sometimes franchisors allow this type of business, because it is beneficial for them to expand it.

How to choose the right franchise for Moscow?

Ideally, if you are already familiar with specific type business and know all its pluses and minuses well. If practical experience no, you need to study the maximum information about the franchisor. For example, to begin with, visit the office (shop) of the company under the guise of a client, to see how it all looks in reality. You may be able to communicate with franchisees who already work under this brand. Read reviews about the franchise, find out how many branches are open under it. As a rule, under the name of developed and successful companies dozens or even hundreds of franchisees work, because profitable business stable and worked out to the smallest detail.

In the end, think about what exactly you like, and in the most free form. Do you like coffee or sweets? Then you will be able to open a cafe or coffee shop with great success and pleasure. Do you like to draw or are you interested? Today, there are more than enough franchises in these niches.

In the case of Moscow, choosing a franchise is generally very easy, because there are elite areas with wealthy residents, as well as peripheral places where among local population budgetary goods and services will be in greater demand.

In fact, any type of business can be franchised, and this is often one of the goals of any experienced entrepreneur. Expanding your business, while getting a good percentage and greater recognition is best result for many businessmen.

Money to start a business in Moscow

Naturally, the choice is also influenced by the size of the budget that the entrepreneur has. It’s good if there are several million rubles in reserve and it’s not scary to lose them, but what about those who do not have decent start-up capital? Fortunately, there are several options for starting a business in Moscow today. In particular, you can attract money from outside, for example, in the form of a subsidy or grant for business development. Credit can also be called additional opportunity, but here it is worthwhile to approach the issue very competently, because in this case the entrepreneur risks not only to burn out, but also to remain with large debts. In Moscow today there are various business incubators and centers to help start-up entrepreneurs. Of course, there is in Russian capital and the mass of private investors who may be interested in a particular direction. It all depends on the profitability of the business and how the entrepreneur will present it to a potential investor.

Advantages of a franchise business in Moscow

Moscow is exactly the city where people look at the brand more often than at the price. It is quite natural that there are already fans of a particular brand (company) here, so it is very easy to find a target audience for a franchise business here. Surely in some particular area there are people who are forced to travel to the other end of the city in order to taste their favorite specialty dish or, for example, buy clothes from their favorite brand. Naturally, they will be very happy if a company store or a favorite coffee shop opens in their area. Moscow is known to be very big city, so here you don’t always want to stand in traffic jams or take the subway to the right place.

When buying a franchise, an entrepreneur joins a trading network or becomes a representative of the company that provides him with full consulting, marketing and legal support. Equipment is provided, and sometimes assistance is provided in the selection of premises and staff.

By opening a franchise business, a person joins a business that successfully brings profit not only to the franchisor, but also to the partners of the company. Here can be given priceless advice on general issues and, if possible, share experience with other franchisees. It's definitely better than getting into an unfamiliar kind of business without any support.

When working on a franchise, an entrepreneur does not need to come up with a business idea, because everything has already been worked out and tested in practice more than once. There is a clear business strategy and it is enough just to invest start-up capital. Today there are many franchises that are great for entrepreneurs with no experience in business and personnel management.

A proven way of business development is an opportunity to save on marketing research, market analysis and study of brand popularity. If the niche is in demand, then the profitability of the business will be obvious. Some franchisors provide truthful data on expected income and payback periods. They have no reason to deceive their franchisees, because any owner of a large company is interested in his brand developing.

It is noteworthy that the representatives of the franchisor can draw up an individual business plan for a particular branch - this will clearly determine all costs. In addition, a design project of a retail outlet can be developed and the entire cooperation scheme in the case of a franchise is usually signed in detail. This will reduce many of the risks that can be quite significant in any kind of business.

Do not forget about the advantages of franchising in the sense that the franchisor is a reliable guarantor when obtaining a loan or subsidy, because any investor or lender understands that a well-known brand is the key to stable and high income. Sometimes franchisors can officially confirm the fact of cooperation, and this is a good help in obtaining investments.

Cons of a franchise business in Moscow

Sadly, the franchise business has its own negative sides. Moreover, if you do not know them, then you can easily “burn out” at the earliest stages of work.

Probably the most significant disadvantage any franchise is that the future of the business directly depends on the franchisor. That is, if the owner of the parent company decides to stop its activities, then the entire network will automatically be closed, regardless of the number and profitability of branches. To protect yourself from this moment, you should carefully study the terms of franchises. In particular, some agreements explicitly state the terms for using the franchise and talk about compensation for damage in the event that the company's activities are terminated.

Do not forget about such moments as royalties and advertising fees - they are somewhat similar to loan obligations, especially since they must be fulfilled constantly and throughout the entire period of cooperation. Often, these payments are a fixed amount that is paid regardless of profits, so paying royalties is not always easy. However, there are also franchises that do not imply any deductions - when buying a business, a one-time and fixed amount is paid.

The downside can also be called a strong dependence on the franchise owner. Obviously, there may be tight control on the part of the franchisor and the entrepreneur can sometimes feel like a hired employee. On the one hand, this may have a positive impact on profits, but at the same time, the franchisee will be forced to work within narrow limits, constantly reporting to the head office and unconditionally following corporate rules. In addition, dependence here also implies that the prosperity of the franchisee's business directly depends on the demand for the brand. Therefore, if they start to appear negative feedback or news about the parent company, then the shadow will fall on all its branches, and this, again, is fraught with the loss of customers. Again, if we are talking about Moscow, then control can be stronger, and attention - more. It is natural that all business processes here go much faster than in small towns.

The total investment when starting a franchise business is often more than when starting from scratch. When buying a franchise, you will have to pay an initial fee, buy goods and various marketing materials. When starting a business on your own, these expenses may not be required, and in general you can save a lot, because in this case full freedom choice.

What is important to remember when opening a franchise business in Moscow?

Based on the foregoing, we can make a fair conclusion that it is better to choose a franchise business that better meets the individual criteria of an entrepreneur. As we said at the very beginning, today in Russia, however, as well as in Moscow, hundreds of franchises are successfully operating, so it is difficult to give recommendations on which one is better to choose. You should build on, at a minimum, the financial possibilities and conditions offered by the franchisor. It is necessary to carefully study all the nuances of such cooperation, and only then it will be possible to say that this partnership will be more likely to be successful.

Having caught fire with the idea of ​​​​creating his own business and having viewed hundreds of seemingly profitable franchise offers, an aspiring entrepreneur with fire in his eyes runs to his future mentor partner to buy a franchise. And it's good if the partner turns out to be a real mentor, and the franchise offer is really profitable. And if not?

After reading this article, you will learn:

• How to avoid the 12 most common mistakes new franchisees make
• How not to run into scammers
• What you need to know when choosing a franchise
• How to negotiate with a franchisor
• and much more.

So you've decided to buy a franchise. How not to make a false choice?

Beware of fakes!

To begin with, it is worth familiarizing yourself with what franchises are, selling which companies are engaged in, one might say, fraud. There are three types.

Firstly, shell franchise. Entrepreneurial citizens create a trademark and copy all the attributes of some popular brand - from corporate colors to the terms of the franchise package. As a rule, such a trademark is not even registered. An inexperienced franchisee takes the bait and buys a worthless franchise.

In addition to external similarity, such a franchise has nothing to do with a popular brand.

It has no commercial value. the main objective creating a shell franchise is to make a quick profit, to push the franchisee to buy a franchise, the price of which is based on false popularity and fame. Only after signing the contract, an inexperienced entrepreneur feels all the consequences of a rash purchase.

The unfortunate franchisee pays for the mistake not only with his money, having bought a dummy, but also with his reputation. The owner of the original brand, having discovered a fake, can sue, and for both the buyer and the seller of the franchise. Using a stolen idea and delivering a low-quality product, the franchisee will forever lose the trust of customers and partners.

There are enough examples of empty franchises. So, the famous pseudo-franchise « ZaraZara» in a certain moment had more outlets in Russia than the original Zara. Or Eurosvyaz- the prototype of Euroset, too lazy to come up with even a different logo.

Naturally, the fight against such dummies and plagiarists is carried out by the owners of real brands. So, for example, recently the company faced a similar problem, having discovered its double. The owners of the original product learned about the pseudo-franchise from a franchisee partner and found out that the owners of this dummy, pretending to be potential franchisees, stole the contract form, image and concept of machines from PrintInstvud.

“We developed the model ourselves, appearance of their machines and, accordingly, we produce them ourselves. In order to coordinate the appearance of the machine with the franchisee, we send him a visualization - a layout of how it will look like. On the website of the pseudo-franchise, we saw fragments directly from our presentation. Now we are working to ensure that the site of scammers is closed, ”a representative of PrintInstvud shared information.

The second enemy of a potential franchisee is one-day franchise. Very beautifully painted benefits, backed up by convincing but unverified facts. A wonderful tale that is told to the franchisee so that he pays the entry fee. Literally a week after he gives the money, the buyer will never see or hear from his “franchisor” again.

Such companies and franchises are created with the aim of making money and disappearing.

So we urge you to pay attention to the date of registration of the company and the date of opening the franchise. If both dates are doubtfully recent, then whatever they say or promise, it is better to pass such proposals by the side.

And the third, but not the most terrible enemy are "raw franchises". A young company with a promising business, which, in principle, is doing well, decides to open a franchise. However, she has neither experience, nor well-developed business schemes, nor the ability to provide proper support to franchisees. That is, in this kind of franchises, again there is no thing for which people actually buy franchise offers.

“Unfortunately, such companies in recent times is getting bigger and bigger. Now there is a kind of “franchise fashion”, i.e. many entrepreneurs, even if they have only recently started a business and are not yet very well versed in it themselves, are quickly trying to create a franchise and start selling it. It is clear that in this case, about any quality of materials and transmission real experience, verified and proven technologies are out of the question. This devalues ​​the very concept of "franchise", - the representative of the company shared his opinion Maxim Seryakov.

The “raw franchise” has two possible development paths. The first is that the business will close in a couple of years, bringing both the franchisor and its franchisee only losses and a damaged reputation. In the second case, together they will find ways out of difficult situations, checking for errors the performance of the business model. However, in this case, a logical question arises: why give money for a franchise if you have to go through all the same stages as with independent discovery business?

Think with your head

A very serious mistake of a novice franchisee is excessive trust in the franchisor's forecasts. In large companies, as a rule, there are franchising departments involved in sales. It is clear that their goal, no matter what, is to sell their franchise. We do not want to say that you can not trust anyone and that everyone is completely deceitful. But given the risks that the franchise buyer takes, he should be more critical of the promises of the franchisor.

It would not be superfluous for a partner to independently analyze the market in the territory of the proposed business location. If you are considering buying a franchise for small town, then it may well turn out that the product that was in great demand in the center of the capital, in your case, will be completely unclaimed. It is also worth looking for nearby competitors, perhaps there will be so many of them that there is simply no point in opening a business in this area and in this place.

Plan your budget

Franchisees need to calculate their costs at the initial stage and acquire a monetary airbag, in the amount at least 1/3 from the initial investment. When starting a business, there are always unforeseen but necessary expenses and hidden fees. Therefore, we recommend discussing the budget in detail with your franchisor, since companies usually indicate the average amount of required investments in franchise presentations.

Chat more!

You should not limit yourself to communicating with only one representative of the company, moreover, if his main task is to convince you of buying a franchise. Talk directly to your manager and also to the people you will be working with. Your task is to get as complete a picture as possible about the franchise and the business you will be involved in.

For successful work For a franchise, at a minimum, you need to learn as much as possible about the company itself.

“Determine the scope of the company’s business, find out what way the franchisor offers to sell its products, pay attention to the type of goods and services, the advantages of the franchise, whether the company is a manufacturer, what is the quality of products and the geography of distribution of franchised enterprises,” the representative of the company shares his opinion Sergei Selyakov.

Be sure to find contacts of other franchisees of this company, including former ones. We recommend that you come and see how the current business works under the chosen franchise, communicate with the franchisee, hear first-hand feedback about the company that will become your franchisor.

If you're considering acquiring a non-exclusive franchise in your region, it's worth finding out about the location of your closest fellow competitors and agreeing on a sphere of influence.

If the franchisor hides the location and contacts of his franchisees or any other information from a potential partner, it is clearly not worth doing business with him.

Ask the Right Questions

Talk to your franchisor and find out not just how many franchises the company opened, but how many closed and why. It would also be nice to know how many enterprises are reopening, that is, are franchisees limited to opening only one point? This information will be very valuable to you. And again, we will make a reservation if the franchisor does not want to provide you full information, no need to start business with it. You don't want to buy a pig in a poke, do you?

“Transparency and purity of relations are a priority for our company, therefore, during negotiations, we do not try to hide information about isolated cases of closed franchise stores. On the contrary, we talk about what caused the failures, what mistakes the franchisees made. We are convinced that the key to the successful development of the franchising system is, first of all, open and honest relations,” the company explained its position.

Don't Avoid Learning

Franchisees should adequately assess their strengths and knowledge. The decision to run a franchise business comes different people, with different experiences. Someone has no business practice at all, someone has experience in managerial positions, and someone already has their own enterprises, opened from scratch.

Whatever colossal business experience you have behind you, training from a franchisor is necessary!

He will explain how to start a franchise business from scratch in a field that is completely new to you. After all, every industry and every company has its own characteristics, which you may not even be aware of.

Education important element when buying a franchise! An experienced franchisor should transfer knowledge, proven methods of work and schemes for building a business to you. Learning and developing, constantly improving, is necessary for every entrepreneur who intends to build profitable business on the long years. Otherwise it is impossible to achieve success.

“When we offer a franchisee to listen to our recommendations, we do not question his life and professional experience. We pay attention to the difficulties possible difficulties, specific aspects of our business model, trying in this way to make it easier for partners to own way in business,” notes the co-owner and founder of the TM franchise Zhanna Asatryan.- “As a rule, very creative franchisees start experimenting from the first month, believing that after working for 2-3 months, they understand better than the franchisor what, when and in what ratio they need to sell. Such experiences always end badly. A franchisee rarely survives a year and closes with a pile of debt to suppliers. We part with such would-be franchisees, usually mutually dissatisfied with each other.

Don't expect everything to be done for you.

In the world of franchising, there is one big myth that when acquiring a franchise, a person does not need to try and invest in work. However, a franchise business is the same business in which you need to work and think all the time - first of all, the franchisee himself. Yes, the franchisor provides already proven developments and helps the new partner avoid many mistakes, but the direct owner manages his business first of all.

Together with the franchisor, the partner should strive to optimize the business, eliminate errors and develop. Of course, to begin with, it is important to set up the work of your enterprise and learn a lot new information. However, you cannot stop there and together with your mentor you need to move forward, look for new opportunities and eliminate inefficient mechanisms.

When choosing a franchise, one must be aware that it is impossible to determine in advance which franchise will be the best. How successful the purchased business will be depends entirely on the entrepreneur who bought the rights to the trademark and develops his business under an agreement with the copyright holder. But still, it’s worth having at least some ideas about how to choose a franchise.

Market trends in Russia

Before moving on to practical recommendations How to choose a franchise, it is worth giving some idea of ​​what is happening in the franchise market in Russia today. Until recently, a single scheme for entering the market of a new one was used. The company made a decision to sell the franchise, developed appropriate schemes, and then brought the offer to the market. Today, another trend has emerged, when a company has to respond to the demand of potential franchisees, to form an offer according to demand.

As practice shows, average check of such franchises is $150,000. However, about a third of entrepreneurs interested in franchising are willing to pay more.

Along with large and well-known brands, this business model is increasingly being adopted by regional entrepreneurs. At the same time, the level of franchise supply has grown qualitatively. Today, copyright holders carefully develop proposal packages.

Another notable trend is the expansion of service and service franchise offerings. These are beauty salons, publishing houses, real estate agencies and especially banks that are more willing to support lending in this area.

Franchise Selection Criteria

Choosing a Franchise serious step, which largely determines the success of your business and the effectiveness of your investments. Therefore, it must be approached with all seriousness. A decision must be made based on an assessment of such factors:

• your possibilities;
• local market trends;
• the franchisor personally;
• franchise system.

Your opportunities

First of all, you need to assess your financial capabilities, that is, how much money you are willing to invest in this business and how much money you have available. It must be understood that in the first months of work, a lot of investment will be required. Therefore, if your funds are only enough for a lump-sum contribution, you need to think carefully before signing the contract, and once again not take risks. The turnover promised by the franchisor usually refers to companies that have been on the market for more than a year. Until then, you are at great risk.

Also, you must immediately decide whether you will personally run the business, or hire a manager, and limit yourself to investing in the enterprise. In addition, you should be clearly aware of how ready and able you are to follow the requirements and standards set by the franchisor. Feature Russian franchisees - the desire to do everything in their own way, bypassing the established requirements. In this case, it is better to purchase a domestic franchise, since foreign copyright holders are very strict about fulfilling the terms of the contract.

Local Market Trends

It is necessary to evaluate the local market according to certain criteria. First of all, in terms of population. It demonstrates the potential target audience, its likely size. It is also necessary to assess how much your product or service will interest the population, to determine which particular segment of consumers is interested in it.

Along with this research, you need to find out which brands in your field of activity are already on the market. This will give an understanding of the level of competition as well as possible ways market entry and product promotion.

It is important to evaluate trading platforms locality. Some franchisors are ready to sell the rights to their business only when it is opened in certain conditions, for example, in large shopping centers.

Franchisor's assessment

Special attention should be paid general characteristics franchisor. It is necessary to clarify how many years it has been on the market this company how many franchises she has sold and how successful they have been. It is believed that a long stay on the market indicates the maturity of the franchise and its adaptation to the conditions, while the young one is still undergoing an approbation period and has great risks.

It must also be taken into account financial position franchisor, its competitive advantages. It is worth knowing and comparing the number of open, closed and operating franchise enterprises. In case of their closure, it is necessary to clarify the reasons for such steps. Be sure to clarify the development plans of the main company. Otherwise, it may turn out that the franchisor plans to close the business, and through the sale of franchises is trying to do this with maximum benefit for himself. After talking with a company representative, try to evaluate general impressions from negotiations. To what extent the partner was open with you, frank, whether he provided comprehensive information to your questions, whether he showed loyalty, and so on.

System evaluation

In addition to assessing the franchisor itself, it is worth separately assessing the state of the current franchise system in which you plan to work. Even if the right holder is determined to openly conduct a dialogue and is ready to develop the network, it may still be underdeveloped, not have sufficient weight in the market. Therefore, when making a choice, you should take into account such nuances:

How are legal issues resolved?

First of all, it is necessary to clarify whether the trademark is registered, whether it has main company relevant patents, whether there are any restrictions on working with franchisees. For example, most often the right holder requires that the franchisor does not enter into any such agreements in the same business area.

When studying the contract, it is especially necessary to carefully study the conditions for terminating the contract and leaving the company from the network. As a rule, the franchisor sets the most favorable conditions for himself, for example, the right to buy out the franchisee's business below cost. Particular attention should be paid to the study of legal issues, when partnerships with foreign companies are being established. Often there are discrepancies in terms with them.

Payout Issues

It is known that payments to the franchisor consist of a lump-sum fee and royalties. It is these provisions in the contract that need to be evaluated. A clear justification for the amount of the lump-sum contribution must be required. If this is not clear from the contract, you must ask the representative to describe in detail the points on the basis of which the requested amount was withdrawn. Because in various fields businesses, the lump-sum contribution required is different and sometimes it differs significantly. For example, to open travel agency it may take about 400 euros, and to open a clothing store of a well-known brand - up to 25 thousand euros.

As for royalty, it can be fixed or set as a percentage of the amount of profit. However, some domestic franchisors include royalties in the price of the goods supplied. In this case, we are talking about hidden royalties. This scheme is used mainly in the retail business. This solution dictated by the peculiarities of the domestic market, where franchisees often seek to hide the size real income from the copyright holder in order to reduce the amount of interest payments.

Support Scheme

Ask how detailed the franchise support scheme is and how much it is actually provided. Support in business, at least in the early stages, is promised by all franchisors. But in fact, it is rare that anyone provides it or does not provide it in the declared volumes. Therefore, it is worth clarifying the scheme for providing support in stages and in detail, as well as talking with existing franchisees about its real provision.

Requirements for consumables and equipment

The franchisor has the right to require partners to purchase raw materials, consumables and equipment from specific suppliers. In this way, it guarantees the stability of the quality and product characteristics that customers expect from the network. But it happens that the right holder, putting forward such requirements, is trying to earn extra money in this business sector. Therefore, it is necessary to carefully check the validity of such claims.

Activity control

Each franchisor who values ​​his business and reputation is simply obliged to think over a scheme for controlling the work of the franchisee. Ask if your chosen copyright holder has one. It must necessarily introduce such a control system as a “mystery shopper”, which helps to most accurately determine the level of service and product quality.

Benefits for cooperation

This may not be a mandatory condition, but it is still worth asking if the franchisee is provided with certain benefits when signing a franchise agreement. Such benefits may include a guarantee that the franchisee will work in a certain territory without competition from other partners - the so-called territory exclusivity. Large discounts may also be provided compared to the conditions for the purchase of goods by wholesale companies and so on.

Communications

To some extent, this characteristic has something in common with control and support. Check with the representative if the franchisee is given the opportunity to communicate with key employees of the company. This opportunity testifies to the reliability of the copyright holder, the real solid position of the company. Sometimes he develops and offers excellent conditions, but the company is represented by two or three people. Naturally, with such a staff it is difficult to provide reliable and constant support to the franchisee.

To find out the real state of affairs, again, it is worth talking with the current partners of the main company. When communicating with these franchisees, try to find out the following things:

• whether their expectations about the business were justified, whether they are satisfied with the acquisition of the franchise;
• to what extent the results declared in the plans correspond to real situation of things;
• what are the advantages and disadvantages of cooperation with a specific copyright holder;
• what kind of support it provides and whether it provides it in the declared volume;
• How accurate is he deadlines supply of goods, etc.

Successes and failures of the company

Evaluate not only successful, but also unsuccessful experience companies. As a rule, the main failures are related to the supply of goods. The issue is especially acute with the regions. It often happens that the franchisee has equipped a point of sale, purchased equipment, but the goods have not yet arrived. Failures can also be associated with an unsuccessfully chosen place of the outlet.