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Buying a Franchise: When you need to worry about location

By News Express on 16/01/2017

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Let me start off by sharing my view on “location, location, location.”

While it is true that securing a great franchise location can be critical to your success, it’s only one of many things that can contribute to your ultimate success as a franchise owner.

Most of the people I work with me, who use my franchise ownership advisory services, bring up “location” pretty early on in our discussions. They are really focused on getting a good location for their yet-to-be-chosen franchise business.

While the importance of choosing and ultimately having a good location can and sometimes does dictate the success of a franchise business, it’s a massive waste of time for my clients (and you) to allow location-related thoughts to occupy a lot of your time as you try to find that perfect franchise opportunity.

Tip: Don’t obsess, worry, or even think about location until you decide on a specific franchise and you are towards the end of your research process.

Should I trust the franchisor to pick a good franchise location? In a word: Yes! Of course.

Why wouldn’t you trust the franchisor to help you secure a good great location for your franchise business?

Don’t you think they want you to succeed, Stop with the paranoia. Don’t listen to people that have "heard” of franchisors that have purposely picked bad locations for their franchisees.

Here’s why it behooves on you to ignore petty comments like that:

The more you make, the more the franchisor makes –

If you become the owner of a franchise business, you’ll be sending in a monthly royalty cheques to the franchisor. It could be 4 to 10 percent of gross sales. So, if your franchise does 40 million Naira in annual sales, and the royalty is 6 percent, the franchisor gets 2.4 million Naira from you. And, they get 6% from every other franchisee, too. Do the math. The franchisor wants you to succeed. They want you to send them big, fat, cheques – every month, for the life of your franchise agreement, which is typically 10 years.

They want your location to be a winning one. And, if they want to be a successful franchisor, they need your franchise location to be a successful one. They need you to be successful.

So, you will handle calls from others (like this potential franchise owner) who are interested in the franchise just like this:

Choose, research and purchase

Do it in order. Make sure you’re a fit for franchising; choose a few opportunities to explore. Explore them. Learn about them. Do great franchise research. Write a formal business plan. Apply for a franchise loan. Make your decision. Find a great location. Open for business.

I hope you would have enjoyed the various perspectives of this lesson to consider when choosing franchising as a business model. For further details you can contact me for business advisory services and training, send me a message via WhatsApp or SMS.

•Lawrence Nwaodu is a small business expert and enterprise consultant, trained in the United Kingdom and the Netherlands, with an MBA in Entrepreneurship from The Management School, University of Liverpool, United Kingdom, and MSc in Finance and Financial Management Services from Rotterdam School of Management, Erasmus University Netherlands. Mr. Nwaodu is the Lead Consultant at IDEAS Exchange Consulting, Lagos. He can be reached via nwaodu.lawrence@hotmail.co.uk (07066375847).

Source News Express

Posted 16/01/2017 2:21:15 PM

 

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