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The keys to opening a franchise and getting it to succeed

The keys to opening a franchise and getting it to succeed

Published in El Mundo , 20 - October , 2017 abogados franquicias Overview franchises

Starting up a 100 Montaditos, an Eroski or a Mango store sounds to assured success, although not all franchises are so popular or so profitable. There are other chains that require less investment and have become, especially as a result of the crisis, a form of self-employment. But what is the formula for success in this business model?
How to choose a sector in which to undertake?
The first question that must be asked of anyone who wants to open a franchise is: do I serve as an entrepreneur? Because not everyone is qualified to have their own business, nor any boss is willing to incorporate in your company the guidelines that mark you from the franchisor.
"An analysis of the three p: personal, professional and patrimonial must be done. As much as you provide the tools to implement a successful formula, the franchisee is going to be an entrepreneur. If you have a high level of risk aversion, this may not be your thing, "says Miguel Ángel Oroquieta, managing partner of T4 Franchises.
From there, the franchise system is broken down into a wide range of sectors, so the future entrepreneur has to assess what he likes, analyze the sectors that are experiencing the greatest boom and, very important, "be aware of the economic resources available to them '.
Is it better to open a historical franchise or bet on a newly created chain?
While the more conservative - and those with a larger budget - usually opt for established brands, such as McDonald's or DIA, experts recommend valuing the option of betting on emerging chains. Although they involve a greater risk, the first franchisees benefit from advantageous conditions such as a lower entry fee or a longer term contract than usual. "If the average stay is usually five years, in these cases could be extended to 10 or 15," added Oroquieta.

How much do I invest?
Doing a market research and financial analysis before making a decision is critical to avoiding future borrowing. Generally, the same brand offers different types of franchise depending on the investment, as it appears from the 'Decalogue not to be wrong in choosing a franchise', prepared by the Spanish Association of Franchisors. Thus, the entrepreneur can choose, for example, between opening a few square meters stand in a shopping center or settling in a large room on a central street.
"In addition to the initial investment, we must not forget the cash needed to deal with the first few months of activity; not all businesses start making money, "adds Pablo Gutiérrez, managing partner of World Franchise Operations. From this consultant, they recommend that around 50% of the investment be from own resources because "if you are 100% financed, interest can be very damaging to the operating account", he points out.
Be informed to avoid abusive conditions
Once the franchise is chosen, experts recommend that you go to the Register of Franchisors to obtain information about the chain, in order to verify that the brand is registered and is based on a business model of success. "You have to look for your experience, your billing, and make sure that franchisors have a consolidated structure to support support and support for all stores. In addition, it is convenient to speak with people who have opened the same business in the area, "explains Gutiérrez.
What is the best location to open a business?
Usually, the headquarters advises on the type of premises and the geographical area in which you want to open each franchise, although it is the employer's task to look for an establishment that meets the conditions. "If they are home service companies the location is less important, but in impulse businesses, such as clothing stores, the target audience traffic through the door of the premises is essential," says Gutiérrez. Thus, in the case of catering, the most appropriate areas are shopping malls or office areas, while if you want to set up a car workshop, for example, access to it is very important.
Is opening a franchise free of risk?
It is a mistake to think that being backed by a prestigious brand is risk free. These are minimized but do not disappear. "In addition, the entrepreneur must know that he will pay large amounts of money for everything he receives from the plant, something that would be avoided if he set up a business on his own," says the partner of T4 Franchises
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In order to avoid conflicts, experts advise that the contract with the franchisor should have exclusivity in the area, so that "they do not allow the opening of an establishment of the same brand nearby that may involve competition". This is ensured by Juan Ramón Montera, secretary and lawyer of the Spanish Association for the Development and Defense of the Franchisee (Aedef), for whom it is essential to ensure that the term of the contract allows to recover the investment and make money - recover, in three years.
"It is important to specify the conditions of renewal so that at the end of the contract the company can not decide on its own to grant the franchise to another entrepreneur and thus lose the investment made," he concludes.

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Las claves para abrir una franquicia y conseguir que tenga éxito
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