Why invest in a franchise?

In difficult times, financially speaking, as we are now, saving is one of the priorities for most people.

Franchises, being a proven business scheme, have become one of the most viable options to invest our savings. And not only that, but in this time of crisis they have proven to be one of the least affected businesses.

Let’s know the aspects that have made the franchise sector bear fruit and that place it in a better chance of success than independent businesses.

The facts are what confirm that franchises are one of the most viable options to achieve success even in this time of crisis.

Mainly the possibility of failure of a franchise is much lower than it would be to open an independent business. Why? Because you already have a recognized brand, a whole team behind you and, above all, experience in the franchised business that has resulted from time where trial and error have determined the best way forward.

Unlike an independent business that is starting from scratch and therefore has a long road of learning that consists of testing, successes and setbacks, market research and competition, increase their experience in the business and achieve a positioning or brand recognition, where at the end of this road, it is clear that the costs in time and money, are much higher than it is to pay a fee or fee of a franchise. This does not mean that it will not be a successful project, but simply that it would be a slower and riskier process.

There are different advantages for people who get a franchise

-They have a company that supports the brand

-They will get training on a know how

-They belong to a network of franchised units where the economy of scale improves costs as the network grows.

-They have permanent technical assistance during the operation.

-Sense of belonging to a recognized brand or one that is in the process of growing.

It is very important to be sure that the franchise in which you are going to invest is properly developed and advised, for which it is recommended to approach a consultancy that can support in the election of the same one and that accompanies during the process of revision and negotiation, with the purpose of offering greater security to the investor.

What you should know before buying a franchise

Before making a final decision and deciding to invest in a franchise, it will be necessary to have as much information as possible about franchises, so as not to have any surprises later on and to ensure the money you invest.

The experts assure you that you are never really able to make a correct decision in the business world, until you know very well the sector to which you will integrate.

That is why in almost every country there is what is called a “pre-contractual information right” for future franchisees; that is, the ability to have all the available background of the brand to analyze whether the investment alternative is the most suitable for us.

Some of the questions you should answer with this information are: Is it what we are looking for, does it meet our expectations, does it fit the chosen sector, does it give us the security to invest, among others.

To be able to do so, the person must have the following information at hand 20 days in advance:

Identification data

Among these data we find the reason, the company’s address, the share capital, as well as the way it is distributed and the identification of its shareholders. Other important data such as the date it was constituted and started with its chain of franchises, will be available in a review of its history and evolution in the market.

Finally, the structural endowment of the central franchiser and an organisation chart of the franchise department.

Sector in which it operates

The franchiser must inform you about the situation, evolution and perspectives of the sector in which the franchise is developed. Also regarding what is the business concept, its main characteristics of positioning and differentiation from more direct competitors.

Don’t forget to find out what your target audience is, who you will have to address.

Structure and extension of the network

Something very necessary to know if what we are looking for is to associate with a prestigious and successful company is the number of centers, both own and franchised, that manage the chain. Thus, the franchiser must inform you if there has been any store that has had to close, as well as the reasons that caused that failure.


Details of the brand you will be operating under, since an indispensable requirement for franchising a company is to have the brand under which the chain operates granted and registered.

Another element to consider is called “exclusivity box”, that is, the area that will be granted to us to be able to operate your business exclusively. There are also some requirements regarding location, conditioning, surface area and other aspects related to the infrastructure of the premises.

Do not forget: marketing and advertising policies, training and assistance you will receive, initial investments needed and income estimates in months and years.

The main characteristics of the franchise contract are:
+Rights and obligations of the parties.
+Duration of the contract.
+Conditions and causes for renewal.
+Financial obligations that you will have to face as a future franchisee.

More information in infowaralaba blog

10 Tips for Running a Successful Franchise

To make your choice:

1 Have the required profile

Make sure you have the necessary skills to run your franchise. You must, for example, be a good manager and have good people skills, be passionate about the industry you want to work in and have the support of family and friends.

2 Choose your franchise carefully

Get as much information as possible about the franchise you are interested in. Clear up all your doubts by asking the franchiser and contacting some of the franchisees on the network.

3 Prepare a realistic Business Plan

The preparation of a realistic Business Plan will help you to see clearly the viability of the project. A complete Business Plan will provide information on the long-term success of the business.

4 Seek help from professionals

Are you worried that you don’t understand the terms of the franchise contract or are not sure you can afford to start a business financially? Don’t hesitate to contact lawyers and/or accountants to help you.

5 Don’t leave any room for doubt

Are you 80% sure your franchise will work? What makes you doubt? Try to eliminate any doubts or ambiguities you may have and get as close to 100% as possible.

To manage your franchise:

6 Take advantage of the franchiser’s support

The franchisor must give you the training courses you need, as well as the operation manual of the franchise. In addition, the franchisor or other members of his team must be available to you while you are managing your franchise. Do not hesitate to contact them if you have any questions about the operation of the business.

7 Knowing how to deal with problems

Don’t wait for the problem to get worse, you must react immediately to solve it. Be prepared for problems that may arise, for example by considering possible solutions in advance.

8 Be aware of other franchisees and the competition

It is important to be aware of the market situation and the sector in which you operate. You can learn from the successes or failures of other franchisees in the network or from your competitors.

9 Prepare for the future

It’s important to have long-term goals, it will help you stay motivated. In addition, sound planning will help you identify problems before they arise and find the necessary solutions in time.

10 Being constantly motivated

Being a franchisee is a daily challenge. You must always be on your toes. Even if business is good, don’t relax.

How to buy a franchise

To open a franchise, an entrepreneur must evaluate his profile, look for franchises that fit his profile, evaluate them and detect which are better businesses in his market.

The candidate must request information from the franchises, ask for the pre-contractual information dossier and analyse it thoroughly.
For the 5 brands that fit him best, the candidate must know the franchisers and the franchise headquarters personally.
The contracts must be read and analysed.
The opportunities must be assessed and a business plan prepared.
You must apply to the franchise by answering the application questionnaire.

You must know other franchisees

When there is interest in signing the franchise, the canidato can reserve its zone signing the pre contract of franchise. Opening a period to look for premises, refine the investment for the specific premises, finish the Business Plan, close the financing and finish the decision.
Signing the franchise contract.

Steps to franchise a business

Define the income and costs that the franchise will have, to determine viability.
Legalize the franchise.
Document the know-how or Know How.
Execute the franchise processes:
Expansion: Search, select, train.
Operations: Supervise, support and direct the franchisees.

Franchises, what they are and how they work

We explain you about the franchise and we tell you which are the most profitable and secure in the sector, so you can get the right investment for your new business.

You will know what you need to open a good franchise.

The franchise

Franchising has become the most successful system for opening a business, both in Spain and in the international market.

We inform you about what is and how the franchise works, as well as which are the most profitable and successful brands in Spain and internationally.

Franchise: What is

The franchise is a contract that allows an entrepreneur to open the business developed by the franchisor, using the brand, products and work system of the franchise. In return, he pays the economic conditions and is obliged to comply with the franchise agreement.

The franchisor transmits the differential know-how he has developed, grants an exclusive license of the brand in the territory and provides continuous support to the franchisee.

What the franchisor brings to the franchisee

License to use the brand.
The exclusivity of the brand in the area.
The work system, transmitted through training and business manuals.
The products or services.
Help to set up the business.
Continuous support.
The supply, when it is established in the contract.

What the franchisee provides in the contract:

The investment: The money to open your business.
The management and the work: The time and the management of your business.
The commitment to apply the brand and the working method.
The payment of the commitments to the franchiser: Canon, royalties and product purchases.
The obligation to comply with what the franchise contract says.

Franchising: how it works

Successful franchise companies organize themselves to be able to transmit their business model to the franchisees.

They help the franchisees to open and manage their businesses.

Thus, if you want to set up a business, the franchise provides you with a business partner who gives you the brand, the business model, the products and provides you with support services.