5 Ways to Tell If a Franchise Opportunity Is Profitable

Franchise is an investment which, if made right pays back in spades. That’s why, it is imperative that you are indisputable in your selection of opportunity. To play safe, people restrict themselves to the top 10 franchises in Canada of the present time to ensure that they pick from only the best. While that’s one way of doing it, being able to read the profitability of a venture is another assured way of knowing that you are making the right choice. It’s not really a talent if you hear out why. There are some earmarks that are common with every profitable franchise opportunity. All you need is to recognize them and assess. Let’s find out what they are.

Growth Graph

It’s not really as mathematical as it sounds. All you need to concern yourself with in this is if the growth of the units of a franchisor was progressive or not. Growth in companies is expressed in graphs. If you can read a graph you will know that an upward curve is positive and a downward slide, not so much. Find out about the performance of the company in the past 10 years. If it was linear, it means the franchisees have grown but at no significant speed. Look for companies that have a lot of upward spikes in their unit growth graphs.

Average Sales Performance

Try to find out the sales figure of the units. All big companies make their sales figure available at the end of the year. Even if you can’t lay your hands on a catalogued report, finding the final figure should not be easy. The Internet has information galore about businesses. If the average sales figure looks encouraging to you, then it is worth taking the leap.

Franchisee Success Rate

A franchise in Canada faces far less risk of failure. But that does not mean that you do not need to look into the success rate of a franchisor’s units before buying its rights. Find out all you can about the success rate of its franchisees in the past 10 years and judge its profitability by that. If its units have been fairly successful, then that should be a good motivation to buy the rights.

Franchise Reviews

The top 10 franchises in Canada are the ones that have the best reviews written about them. Some have mixed reviews, and others average. There are however a few that despite not being about the top 10 have fairly positive reviews about them. If you do not want to spend too much, you should target this narrow section of companies that are well-reviewed but not highly priced. They are the most profitable of all.

Support from Franchisor

One other thing that makes a franchise opportunity optimally profitable is the kind of support it gets from its franchisee. Not counting the obvious factors like group advertising, shared infrastructure and such, there are still other kinds of ongoing support a franchisor extends to its franchisees. Look out for supports like training, marketing, guidance and such.

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Canadian Franchise Magazine is a digital publication offers several Franchise Systems in Canada. Our magazine gives latest news, expert advice, and franchising information.

Canadian Franchise Magazine is a digital publication offers several Franchise Systems in Canada. Our magazine gives latest news, expert advice, and franchising information.