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How to Avoid
Buying a Medical
Spa Franchise
that Might Go Under
Steve Hockett, President,
FranChoice
Statistics show that your chances for success as a MedSpa
entrepreneur are greater if you start your new business as a MedSpa
franchisee rather than opening a business all on your own. However,
there are times when even franchise systems aren’t successful and
around for the long term. Of course there are no guarantees but you
can boost your chances for finding a franchise with stability by doing
some additional research.
A MedSpa franchise company usually begins when someone has a
desire to bring a product or service to a wider audience. One or more
units, often called company stores, are opened so the product or
service can be tested, refined, retested and improved. Once the
company stores have experienced some success, the company will begin
early franchising efforts.
Opening the first 10-25 MedSpa franchised units is often the
most difficult phase for a franchisor. The company will have to learn
how the concept works in a variety of locations and with a variety of
franchisees. Marketing can be tried on a larger scale and there are
hundreds of details to be modified, changed, refined and locked down. |
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Once this initial group of MedSpa
Franchisees experiences financial success, the franchisor will
open up franchising to a larger group. If you are a risk taker, feel
free to jump in at any of the earlier stages of a franchisor’s
development. If you’d rather avoid risk, confine your research on
potential franchise opportunities to those companies that have
survived the initial stages and have at least 25 or more successful
franchise operations in place.
Yes, there are companies that are solid gold from inception. But as a
general rule, the earlier you get involved in any business, the
greater the risk. Not only that, by joining an established MedSpa
Franchise company you will also avoid many of the bumps along the
road. A MedSpa Franchise that has reached a modest number of
successful franchisees will have added sufficient infrastructure to
support you and the marketing/branding efforts will help draw
customers to your location.
By focusing your search on those companies who have reached this stage
of development, you can increase your chances of success in finding
one that will be around for the long term.
Validating the Medical Spa Franchise
Another way to increase your chances of MedSpa Franchisee
success is to talk to the existing franchisees in a system. This
cannot be overemphasized. The very best way to learn about a franchise
system is to talk to a variety of franchisees and ask them very
pointed questions, such as, “Have they reached their financial goals
as a franchisee?” You want to find out actual earnings, not
pie-in-the-sky expectations. New franchisees are notorious for having
unrealistic expectations about the profitability their business will
experience, until they’ve actually been in business for awhile.
The next question to ask existing franchisees is about the overall
attitude of the franchisor about the business itself. What you want to
see here is an attitude from the franchisor that their success is
based on the success of the franchisees. In general, the more the
franchisor is willing to help the individual franchisees become
successful, the greater the longevity of the company.
Support from Franchisor
Once you’ve talked to existing franchisees and gotten good feedback
about the company you will want to take a close look at the
infrastructure of the franchise company. Your success as a franchisee
will depend on the dedication and expertise of the operational support
people so find out how long they’ve been with the franchisor and what
previous experience they’ve had. Your conversations with existing
franchisees should help you learn whether these people are competent
and accessible but you will also want to talk to these support people
yourself to be assured of compatibility. The operations and support
people are there for your benefit and you want to make sure you will
get your money’s worth out of the association.
While there are no guarantees that a franchised company will be around
for the future, there are ways to position yourself for a greater
chance of success. When doing your research, keep in mind that a
company that has reached at least a modest number of units (a minimum
of 25 is suggested) has a better chance of long-term survival than one
that is new to franchising. If that company also has happy and
successful franchisees and the right attitude toward mutual success,
then you should feel comfortable the company has a very good chance of
survival.
When making a decision as important as purchasing a franchise, you
definitely want to be sure that the company will be around for the
long term and that you will get the full benefits of being part of a
franchise system. The bottom line is that just like any business,
franchise companies can also fail. However, you can minimize your
chances of joining a franchisor that won’t be around by doing a
complete and thorough investigation of the company. This will take
more work on your part but your reward is that you will be better
protected from buying a franchised business that might go under.
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