When evaluating a new Franchise Business Investment, keep in mind these 3 Pillars:

So you have made a decision to become a business owner! Now the big question is: “what business to open?”. You probably have started researching about what business opportunities are available and might be feeling quite overwhelmed: just in the franchising industry there are more than 3,000 options to choose from, among a huge numbers of industries!

Finding the right business can be a daunting task. We recently wrote about factors to be considered and mistakes to avoid (click here to read). We also shared details about investing in a franchise versus an independent business (click here to read). This new article outlays the 3 key pillars that are critical for any business to be successful! When looking for business and/or franchise opportunities, make sure to ALWAYS compare the concepts against these pillars. All pillars should be solid, otherwise, the business might not succeed.

Here we describe the 3 pillars:

Pillar 1: Industry Growthindustry trends

It is important to select an industry category that has future growth expected, according to market reports. You should stay away from industry categories that are too mature or declining.

When talking to a franchisor, make sure to ask for information about the market, key trends, growth rates, etc. Ask questions such as:

  • What is the overall market size for this industry?
  • What are the growth trends? What is the growth rate?
  • Can you share overall statistics about the market?
  • Is this a recession-proof industry?
  • Is this a new industry or a mature industry?

Some industries are recession-proof, which makes them also solid industries to invest in. It is important to think about what could happen to the business if the country goes into recession like it happened in the past. Is this a market that would be highly affected?

Pillar 2: ProductProduct_1

Let’s say you have identified an industry that has great potential. You need to make sure that the product or service to be commercialized in this industry is robust and differentiated enough, otherwise you won’t be able to gain significant market share and customer adoption in the industry.

The key questions to consider here:

  • Is this a high quality product/service?
  • How does the franchisor ensure quality consistency among all franchises in his network?
  • How does it differentiate among its competitors?
  • What is the current market share of this brand/product? What market share changes are expected over the next years?

Pillar 3: Infrastructure (Process and Systems)business process

The third pillar when looking for a new business involves the processes and systems they have in place.

For example, in the case of a franchise system, it is imperative that they have a very robust training and support system. In addition, they should provide some level of marketing support to the franchisee. Good franchises have a great infrastructure that their franchisees can count on, and this increases significantly the chances that the franchisee will succeed.

The key questions to consider here are:

  • What type of training is provided for a new franchisee? What is the training curriculum, how much type? Is there ongoing training in addition to the initial one?
  • What level of support is provided after I start my operations? Is there a structured support channel for franchisees?
  • Are there software or other systems in place that can support me with back-office tasks (billing, accounting, inventory management, etc)?
  • What is the overall company’s marketing strategy? Will you provide me with a website? Do you have a system in place for lead generation to your franchisees? How is your brand being promoted overall?

In a market where there are over 3,000 franchises available, one of the biggest differentiators is the level of experience of the franchise development team, and the maturity of the systems they have in place. By talking to different franchisors and asking these same questions all the time you will be able to see how these companies differentiate and what level of potential each one has.

As we mentioned in the beginning, always look at the 3 pillars and make sure they are robust!




For more information about the franchising industry, and assistance with franchise selection, contact us at:


Phone: +1-760-607-6584 / +1-760-607-6585.

Visit our corporate website: www.franchisewizards.com



Leave a Reply

This site uses Akismet to reduce spam. Learn how your comment data is processed.