Successful franchise systems. What you need to know.
What is the level of competition, nationally and in your community? How many franchise- and company-
owned outlets does the franchisor have in your area? How many competing companies sell the same or
similar products or services? Are these competing companies well established, with wide name
recognition in your community? Do they offer the same goods and services at the same or lower price?
A primary reason for purchasing a franchise is the right to associate with the company’s brand. The more
people that recognize the name, the more customers will be drawn to your location. Make sure you
purchase a franchise that is popular in your area.
What makes a franchise successful?
Many franchisors operate well-established companies with years of experience both in selling goods or
services and in managing a franchise system. Some franchisors started by operating their own business.
There is no guarantee, however, that a successful entrepreneur can successfully manage a franchise
Carefully consider how long the franchisor has managed a franchise system. Do you feel comfortable with
the franchisor’s expertise? If franchisors have little experience in managing a chain of franchises, their
promises of guidance, training and other support may be unreliable.
Is there a demand for the franchisor’s products or services in your community? Is the demand seasonal?
For example, lawn and garden care or swimming pool maintenance may be profitable only in the spring or
summer. Is there likely to be a continuing demand for the products or services in the future? Is the
demand likely to be temporary, such as selling a fad food item? Does the product or service generate