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The essentials of franchise success

Going into franchising is an easy choice for first-time entrepreneurs, and even for the experienced looking to expand their business.
By Rocel Junio, Sherma Benosa And Leth Inolino |

Going into franchising is an easy choice for first-time entrepreneurs, and even for the experienced looking to expand their business. Its turnkey approach to entrepreneurship boasts of a high success rate, an estimated 90 percent. This is because business format franchising is all about following fixed systems—from management to operations and training—designed to maximize resources for a network of outlets.


But in spite of its high success rate, franchising primarily depends on the relationship of the franchisor and the franchisee. Experience has proven that this relationship must be built on shared corporate and social values, coordinated strategies in the macro and micro levels, and common commitment to the business. Through this franchising guide, you will learn how these building blocks of the franchise relationship are as important as having the capital and acumen to run your own business.


Prepare for the partnership

If you’re interested to franchise a business, you must be ready to undergo rigorous screening and evaluation by your future franchisor. You must also examine whether you’re up for the franchise challenge or not.



Answer these questions truthfully: Do you have energy for this endeavor? Can you work well into the night? Are you willing to go 24/7 for your business? As the owner of the business, can you afford not to receive a regular salary for a year or two?


It’s only when you could say “yes” to these questions that you should go on to inquiring about the business. Here are the questions the franchisor and the prospective franchisee should ask the other before sealing the deal:


For aspiring franchisees

• Is the brand popular? Does it have a positive reputation or brand image?

• Does the brand have a loyal, captive market that guarantees good returns? Does it actively promote its products to increase brand recall?

• When did the company start franchising? Is it a reputable franchise business?

• How many franchised outlets does it have? How about company-owned? Is it growing fast, slowly, or steadily?


• How many franchisees does it have? How many franchisees own multiple units? What do they have to say about how things are managed in the company?

• Does the company have a sound franchise agreement? Is it strict about adhering to the contract?

• Is the company involved in any pending legal case? Would it affect the company’s standing in the future?


For franchisors

Has the prospective franchisee tried the product or service the company is offering? What’s his experience like?

• What are the prospect’s motivations for getting a franchise?

• Does the prospect have any experience in sales or business? Is he any good at it?

• How is the prospect in terms of managing people? Has he led a group before? How does the prospect motivate his people to do their best at work?

• Does the prospect run any businesses at present? Would he be able to handle that business on top of the franchise?


• Is the prospect involved in any pending legal case? How would it affect the prospect’s life and business standing in the future?


For aspiring franchisees

• Does the company have a decisive edge over its rivals in terms of product quality and the ability to reach out to its target market?

• Is the franchise category to which the company’s product/service belongs set for the long haul? Is it considered a fad or evergreen?

• How do existing franchisees describe the growth of the company? Is it too slow, too fast, or just right? Would they do anything differently?

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