Specialized franchising consultancy highlights the importance of diagnosis and profile training
Buying a franchise is an investment that can bring great business opportunities, but it also requires careful analysis to avoid falling into a trap. Given the complexity of this process, Focus Franquias, a consultancy firm specializing in business expansion, highlights the main points that investors should consider before purchasing a franchise.
“It is essential that the investor carries out a profile and training diagnosis to understand what makes sense for him and his region. Furthermore, it is important to check whether he has the necessary capital to invest in franchising and consider all the costs that this entails , including franchising fees, working capital and management expenses”, explains Wagner Lovatto, founding partner of Focus Franquias, a consultancy firm specializing in franchising.
Check below the main points to analyze before buying a franchise:
Profile diagnosis and training
Consider whether your business profile and region are suitable for the franchising operating model. It is important to be motivated and involved in the business, as well as study the financial projections and understand which parameters are healthy for the structuring and success of the business.
Capitalization
Make sure you have the necessary capital to invest in the franchise and, if necessary, have a financing plan. All ventures take time to deliver the expected return, you need to have capital to maintain your business until then.
History and reputation of the franchisor
Investigate the franchisor’s experience in the market and brand reputation. Check to see if there are any lawsuits or complaints against the company. A tip is to consult the Brazilian Franchising Association (ABF) to check if the company is a member and its history.
Transparency and communication
The franchisor must provide complete and transparent information about the business, including the Franchise Offer Circular (COF). The COF must contain information about the company’s history, business model, costs involved, rate of return on investment, among others. The franchisor should be open and receptive to your questions and concerns.
Support and training
Consider whether the franchisor has a qualified and experienced team to support franchisees. Proper support and training are critical to business success.
Feasibility and profitability
Analyze the feasibility of the business model and the potential profitability of the franchise. Check whether the market for the product or service offered by the franchise is large enough to support the business. Carefully evaluate the franchisor’s financial projections and do your market research.
Competitive differentials
Identify the franchise’s competitive differences compared to its competitors. What makes franchising unique and attractive to consumers? Does the franchise have technological or marketing advantages that differentiate it from the competition?
Market trends
Evaluate whether the franchising business model is in line with market trends. Is the company susceptible to changes in consumer preferences or new technologies? Is the franchise ready to adapt to market changes?
Legal aspects
Read the franchise agreement carefully before signing it. Make sure you understand all the terms and conditions of the contract. Consult a franchise attorney before signing the contract. Check that the franchise is registered with the ABF, which ensures that it complies with franchising law. Consult an attorney to see if there are other legal issues you should consider before investing in a franchise.
Contact with current affiliates
Talk to the chain’s franchisees to get a real perspective on the business. Ask about their experiences with the franchisor, the support they have received and the profitability of the business. This can help identify potential problems or concerns with the franchise.
“It is essential that the investor is well informed and has the support of specialized consultancy to make assertive decisions. We at Focus Franquias offer a franchise investment consultancy service, which aims to provide training on the fundamental points for the investor, analyzing the entrepreneurial profile, return potential, risk reduction and orientation in the selection, definition and purchase of franchises”, underlines NÃcolas Almeida, founding partner of Focus Franquias.
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Ashley is a professional author and journalist, working at 247 News Update. She writes on various topics from economy  news to general interest pieces, providing readers with relevant and informative content. She brings a unique perspective and in-depth analysis to her work.
