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Should You Buy a Hot Franchise?
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Should You Buy a Hot Franchise?
In theory, buying the hottest franchise around makes a lot of sense; ther;s probably some serious buzz about the franchise, which means that lots of potential customers know about it.
Can you imagine opening up a franchise in a market that already has customers waiting patiently for your arrival? That would be fantastic!
Once in awhile, things happen like that. More often than not, they do-t. Of course, it depends on the type of franchise yo-re buying; if yo're buying a home-based consulting type of franchise, i's not like yo'll be having a huge Grand Opening celebration. Yo'll have to market the heck out of your arrival on the local scene.
A food-related or retail franchise is a different story, however. 've been to many *new franchise business Grand Openings, and the're really exciting. The tow's Mayor (or an aide) is usually in attendance, along with other local dignitaries. Ther's a formal ribbon-cutting ceremony, along with food and drink. It's a memorable time, especially for the new franchisee.
Now, let's talk about a little business reality for a moment. I'll use the stock market as an example.
Did you ever receive a stock tip from one of your friends, or family members? Do you remember that surge of adrenalin that shot through your system moments after you received the details? Did you go out and buy that hot stock? If so, how did it end up doing?
If you're a rather lucky individual, maybe the stock did really well. Congratulations! But, if you're like most of us, it didn't. Do you know why?
The reason it didn't do well has to do with timing; you invested in the stock way too late. It probably was a hot stock at one time. (Like when your friend purchased it, for instance) The problem was that by the time you heard about it, it was already starting to cool off. The same thing can happen with a hot franchise business opportunity.
Just about every time I do a presentation on franchise ownership, someone asks me this question;
Joel, what's hot now? The folks who ask that question dislike my answer, immensely.
The hottest franchise for you is the one that fits what you want in a business. It's also the one that will fit into your budget (with room to spare), align nicely with your personality traits, job skills, and geographic location, I exclaim.
(At this point in the conversation, I usually get a strange look, or if it's my lucky day, someone will roll their eyes at me.)
Here's the bottom line; what goes up, must come down. Hot gets cold. Try to find opportunities that can do well year-round. Look for franchises that can serve a large audience. Find opportunities that make sense for your personal situation, and for the area in which you live. A franchise that allows you to use your unique personality traits and professional skills can turn into a hot franchise.
As a matter of fact, it is kind of up to you to make the franchise business that you end up choosing, hot.
Now, go find it.
* Non-US Government link
The Ultimate Guide to Franchises-Business.Gov
Evaluating Franchise and Business Opportunities- Business.gov
The Franchise King®, Joel Libava, is president of Franchise Selection Specialists Inc. Joel provides franchise advisory services to those interested in exploring franchise ownership, by showing them how to select and research franchise opportunities. He is frequently called on by the media for his no-spin insights on the world of franchising. You can follow Joel on his award winning blog-The Franchise King Blog.