Franchise Evaluation Criteria

IFA’s Criteria for Evaluating Franchise Opportunities

The International Franchise Association recommends considering the following factors before choosing a franchise opportunity:

Costs:
• How much money will this franchise cost before it becomes profitable?
• Can I afford to buy this franchise?
• Can I make enough money to make the investment worth my time and energy?

Your Abilities:
• Do you have the technical skills or experience to manage the franchise?
• Do you have the business skills to manage the franchise?

Demand:
• Is there enough demand in your area for the franchisor’s products or services?
• Is the demand year-long or seasonal?
• Will the demand grow in the future?
• Does the product or service generate repeat business?

Competition:
• How much competition do you have, including other franchisees?
• Are the competing companies/franchises well established?
• Do they offer the same products and services at the same or lower prices?
• Is there a specialty or niche you can capture?

Brand Name:
• How well known is the franchise name?
• Does it have a reputation for quality?
• Have any consumers filed complaints with the local Better Business Bureau?

Training and Support:
• What kind and how much training and support does the franchisor provide?
• Do existing franchisees find this level of training and support adequate?

Franchisor’s Experience:
• Has the franchisor been in business long enough to have established the type of business strength you are seeking?

Expansion Plans:
• Is the franchisor planning to grow at a rate that is sustainable?

More information and resources are available from the IFA website.

For my two cents on selection criteria, read my 10 Criteria for Choosing a Franchise article on my FranBest franchise opportunity site.