6 Keys Factors in deciding a franchise business model that is right for you
Choosing the franchise business that may be best suited for you requires that you are comfortable with the business model.
There are six areas to help determine if there is a good fit between you and the business model.
- Facility. Make sure you are comfortable with where you will do business from—a retail space, an industrial space, mobile, home-based, etc.
At Pure Nectar you have to open a 150-200m2 Production Facility.
- Employees. The people that work for you are there with you everyday. You must be comfortable with the type of people working for you. Are they ‘blue collar’, professionals, salaried, hourly, full-time or part-time? The business you choose will determine the kind of people that work in the business. People are your most important asset and as such you need to be ‘in-tune’ with the people working for you.
At Pure Nectar you have 4- person Management team plus 7 Juicing staff and a Delivery Person.
- Customers. Every business attracts different types of customers. There are customers who appreciate and value different things, price, quality, service, and experience. In your business there could also be many customers with small transactions and a few customers with large transactions. Be comfortable with the type of customers and the transactions that your business will bring.
At Pure Nectar our fresh products serve a customer focused on a healthy lifestyle. Pure Nectar retail customers order on-line while Distribution Point wholesale customers are businesses such as café’s, restaurants, gyms, convenience stores etc.
- Products and services. Some businesses sell products, some sell services and some may sell both. You have to be comfortable with what your business is selling. After all, your passion for your product and service will be essential in your success.
At Pure Nectar we sell only freshly made juices.
- Sales. The scope and size of your potential business is important as it will help you achieve your goals and objectives. How you realize that potential and opportunity is equally important. How do you grow this business is also key–whether it is through wholesale distribution, retail stores, over the internet, door to door and so on. It is one thing to have the potential but important to know how to realize that potential and your comfort in being able to do that. In every business you have to sell otherwise your business isn’t going to grow, but the intensity may vary.
At Pure Nectar, the retail business requires a comprehensive and determined marketing approach. While the wholesale business is lead by a Sales Manager.
- Financial. Obviously the economics have to make sense. Your ability to afford the business, your ability to grow the business to a size that allows you to meet your goals and objectives are important. Your financial metrics have to make sense as you choose your business.
At Pure Nectar, the initial investment will range between US$175,000 to US$250,000. It is possible to have an operating profit of 40%+ in the 2nd year of operations.
It is not important that there be a 100% match in all six areas, however, you must be comfortable that there is sufficient fit between you and the business. The six areas also have varying degrees of priority to different people and you have to determine if all six areas are equally important or some areas have greater importance than others.
Author: Harish Babla is the CEO of Global Franchise Masters Private Limited and the Global Head for Pure Nectar (www.PureNectarJuice.com).