Starting a new business and building the brand from the ground up can be very challenging. From planning your marketing strategies to creating engaging campaigns, and more, building up a strong acceptance and recognition can get extremely expensive. An even riskier event this model could trigger is the possible failure of your new business.
Buying a franchise on the other hand, saves you the trouble of building a brand and acquiring customers. It eliminates excessive marketing costs, years of trials & errors, and places you right in a revenue model that works.
This reason is why franchise businesses are becoming more common in Nigeria. Many Nigerians have taken to investing in franchises, rather than going through the stress of starting a business off the ground.
Here’s a list of top franchise business in Nigeria:
- Dominos Pizza
- Coldstone Creamy
- Debonairs Pizza
- Chicken Republic
- Fan Milk
A few other franchise business opportunities exist in the transport and oil/gas industry.
What you need to know about investing in a franchise
While franchising may have its advantages, it also has its flaws, but some of the best franchise opportunities can have your new business up, running, and highly profitable within the first year. To enjoy the benefits of setting up a franchise business, is important to proceed slowly and cautiously before handing over your franchise fee.
Here are tips you should note before investing in a franchise:
- Buy a franchise in an industry you understand
Never buy a franchise simply because you want to buy one. Never buy a franchise because it is always in the media and seem popular. Buy a franchise in an industry you understand. This is the first step to succeeding when the business begins. When you understand the industry, you’ll be able to handle challenges as they come, you will have the boldness to be creative and innovative.
- Buy a Franchise with Products that has Huge Market Demand
The fact that a franchise is popular in another state or country does not guarantee that it will be successful in your own region. Also, the fact that a franchise is very affordable does not make it a good one. So, a good rule of thumb is: Do your own local market research.
Don’t rely on the research analysis or feasibility report of the franchisor or selling company. How would patronage fair in the area where you want to set up shop? For example, a franchise like KFC thrive in areas like VI, Ikoyi and Lekki. Setting up shop Mushin would require a lot of work.
- Do Your Research
Make a list of several franchises you are interested in, and research the franchise fees and startup costs for each one. Learn all about the franchisor’s personal and business names, its organization; its background; and its financial history. Also get to know if the franchise has a track record of success, and whether this success can be duplicated in your area.
This would ensure to don’t burn all of your business funds and end up closing shop. Choose the best which offers the most flexible and after sales services for the business to grow in the next few months. This will help you in growing the business in your new location and making a substantial profit thereafter.
- Check for Competitors
It is important to look at competition not only from the same company, such as how many Mr. Biggs are in the area where you want to set up shop, but similar businesses as well. Even if you are the only Mr. Biggs in town, there will be competition from small eateries and restaurant down the street and other chain eateries across town.
- Set a Realistic Budget
One of the advantages of starting a franchise is that the franchise fee covers many of your startup costs, but you are still likely to face some financial surprises along the way.
Sufficient capital on hand, in the form of a small business loan or seed capital from family members, friends and outside investors, will help you weather the storm and keep your business running until sales start to come in.