What Franchise Model Is Right for You?
Learn what factors determine which franchise model is right for your business.
Many years ago, the most common franchise was the traditional brick-and-mortar location such as fast food restaurants and storefronts. Modern technology has brought a variety of business models to the marketplace that offer several different models to choose from.
Related: Franchise Bible
Home based businesses are very popular these days since technology has made it possible to perform many business activities remotely. These businesses include accounting and professional services, consulting, digital and other marketing services and a variety of other models. These franchise models offer owners many benefits including lower operating overhead costs, fast and easy startup and the convenience of working from home. Consider the following when evaluating a home based franchise business:
- Are you a good time manager? Working from home allows you to live and work in the same place, which is great for some but a nightmare for others. Many have a hard time concentrating on work with the distractions of home such as children, pets, spouse or even TV or home projects. On the other hand, many struggle with stopping the work to enjoy family time.
- You should give yourself specific starting and ending times to create a regular work schedule.
- Have a door with a lock. You will need to have a private and professional workspace. Additionally, it is equally important for you to be able to shut the office door at the end of the day and focus on home life.
Some business owners prefer to work out in the field as opposed to being tied to an office or storefront. Mobile businesses can be flexible and offer lower startup costs. These businesses include food trucks, home and business repair and maintenance services, pet grooming and other creative service models. Here are a few things to consider:
- Make sure that your franchisor offers a strong marketing program. Mobile businesses do not have the benefit of walk-in traffic so they must generate all of their business with outbound marketing efforts.
- Use technology to maximize your efficiency. Time is money as they say, especially when you have to factor in travel time between paying jobs. On demand scheduling apps, mobile point of sale systems and communication tools can add to your bottom line when implemented properly.
- Check your homeowners association (HOA) rules if you plan to park a commercial vehicle outside of your garage. Many HOAs do not allow any vehicles, including trailers, with logos or wraps to be parked in plain view.
Related: Start Your Own Food Truck Business
Brick-and-mortar locations include the standard restaurants, retail, hotel, storefront and offices. This model offers the potential benefit of walk-in traffic which may be a better fit for someone who is more comfortable having customers come to them as opposed to business models that require outbound marketing or sales. This model generally requires more planning and related expense due to the build-out and construction of the site before opening. Before you decide to open a brick-and-mortar franchise, you will want to keep the following items in mind:
- Location, location and location are said to be the three most important factors in the success of a brick-and-mortar business. Proper due diligence is mission critical to ensure the best location. The franchisor may offer site selection assistance or refer you to qualified service providers that can help you find the best options.
- Use a qualified commercial real estate broker. You should interview a few brokers to make sure that you find one that you feel will best serve your needs. You may find a broker that has experience in your specific business category, which can be an added benefit.
- Read Brick and Mortar Franchise Success by Carolyn Miller. Miller is the founder of the National Franchise Institute, which offers classes and education for location-based franchise operators. This book offers a wealth of money and time saving tips and trick that are a must for anyone opening a brick and mortar franchise.
Most franchise owners report that their business lifestyle was a determining factor in their choice of a business model. Consider the "day in the life" of each franchise model to see how they match up with your ideal business before you choose. You should be able to visit existing franchises or participate in a discovery day visit to get a good feel for how each model operates.