Franchising is the way to go for individuals who are too scared to initiate a plan on their own thinking that the risk is too huge to handle. You should ask yourself first on how would you like to perceive yourself as a franchise owner? Something big that guarantees success? Something safe and mainstream? Or does risk tickle your fancy and you are in a constant search to find undervalued franchises with the hopes that it will eventually boom? It can work that way, as greater risks come with greater rewards.
There are numerous franchises that are considered undefeatable because of its established brand and stable financial growth. However, because these companies can say it outright that stability is their selling point and guarantee. The drawback for this feat is the franchising cost, which is considerably expensive. If you have enough guts to try the riskier ones, particularly the newcomers in the franchising industry, you can actually find offers with better and much lower start-up fees because they are considered as an undervalued franchise. Most risk takers consider this mindset – everyone starts small.
To find undervalued franchises, it is essential that you have at least an idea what the franchise is about. It should not be “all gut feelings” kind of decision, because that will definitely not work.
The Magic of Undervalued Franchises
A “good deal” is common in the more established franchises. However, if you will devote more time in finding the best franchise for you in the undervalued category, you can actually find a “best deal”. A preview of the company’s structure, return of investment, growth, and current brand recognition as well as rates are some of the factors that you should take a good look and consider. Keep in mind that most of the underdogs in the franchising industry are overlooked, but if you’ll give it a double take, it may satisfy your requirements and eventually own the franchise.
Bang for the Buck
Before running towards the bank and request for a Small Business Administration, or SBA Loan, you should take a good look at the qualities of the franchise or franchises that you are interested if they have this shimmering “bang for the buck” appeal. It is a bad move to cancel out the slow-growing competitors in the franchise race. There are numerous franchises that have an ROI scheme and return steady profits year after year, but are not that publicized enough. You may find undervalued franchises that are actually stable enough, but is not that big in terms of popularity.
There are some franchises that are not that appealing but may be worth the try. There are also franchises that grow in a supersonic rate, like Starbucks or 7-11. They grow so fast, you will not notice a new franchise just popped like a mushroom in your neighborhood. But remember, fast is not always the ideal. There are slower ones that may actually tickle your fancy.
Branding is Essential
A brand “sex appeal” can help a franchise sustain its staying power. It can determine how far the brand propels a business for the long term. You can observe how important branding is, especially for companies that have been existing for so long. Harley-Davidson for example, started in 1903 and has gone a long way from there through branding innovation and keeping its brand current. It has been a household name for motorcycles in the United States, and has a steady stream of brand-loyal followers. Branding can make or break a business, it can stamp your company into the pages of history.
However, even if Harley-Davidson is considered as a high-profile brand, it is still qualified to be considered as an undervalued franchise due to its simplistic scope, staying power, and consistent return of investment. You may not find Harley-Davidson in the top 100 fastest-growing companies, but the company never failed to outperform its own growth targets. This factor is one of the things you should take a good look at because you might be blinded by ranks and advertisement, you are missing the good stuff that others can give underneath.
Smaller or Bigger?
The answer will completely depend on your courage, goals, and ideals. You can start with a smaller franchise that will not hurt as much financially compared to franchising a bigger company. However, thorough research and knowledge will help you reach a decision to balance things out. Maybe you are destined for a massive success that is just lying around the corner. This is one of the hidden gems whenever you find undervalued franchises.
The Bottom Line
Finding an undervalued franchise has no definite computation or algorithm for success. It has no definite path or a prepared runway that will propel you to succeed. This process requires guts, patience, taking risks, knowledge, and further understanding. Who knows, your next financial breakthrough could be near you, just waiting to be discovered.