How To Invest In Franchise In Nigeria: Things You Must Know
There is lots of cooperative franchise in Nigeria that you can invest your money into to start your business. All over the world, people are always eager to start their own businesses, and Nigeria is not an exception. I want to believe you have the thought to one day start your own business. There are different ways through which you can own a business in Nigeria and franchise is one of them.
You can start your own business in Nigeria through a franchise. Take advantage of the success achieved by different businesses in Nigeria by buying into their brands. Owning a franchise in the country is a good way for you to avoid starting a business from scratch. The good thing about investing in a franchise in Nigeria is that you leverage on the success of an already existing brand. There are lots of franchise opportunities in Nigeria but the task is always in identifying the good ones. So, you need to be very careful and strategic when investing in a franchise in Nigeria.
What Do You Know About Franchise?
In simple terms, you can see the franchise as a business arrangement or deal where you have to pay money to a company to enable you to use the company’s name, brand, and trademark to do business. There are lots of franchise opportunities in Nigeria which have been successful over the years. Examples of such franchise include Kentucky Fried Chicken (KFC), Best Western Hotels, Crunches Fast Food and Restaurant, etc.
For you to be given the right to operate with a company’s name (the franchisor), there is an agreed amount that you must pay to the franchisor. This stipulated amount of money is called the franchise fee. Immediately the deal is completed, you will be known as the franchisee while the company is called the franchisor.
The franchise business arrangement is mostly witnessed in the hotel, food, and restaurant industry.
How Profitable Is A Franchise Business?
In fact, you can make huge profits by investing in a franchise in Nigeria, but you will have to get everything right. There are numerous franchise opportunities in Nigeria that you can invest in to make huge profits. Many businessmen and women have built great wealth through franchise and you can do even better than these people.
There are certain things that you need to know and put in place if you want to be successful with investing in a franchise in Nigeria.
Things You Must Know Before Investing In Franchise In Nigeria
Study The Nigerian Franchise Industry
Before you put your money into a franchise in Nigeria, it is very important that you have a good understanding of the industry. Currently, the franchise industry is not so popular in Nigeria as compared to other industries. You need to understand the forces that are at work in this industry before putting your hard-earned money into it. Understand the state regulations, taxes, and most importantly the market itself.
What Is The Cost?
Before you invest in a franchise in Nigeria, make sure that you understand everything about the cost. Know the full cost of investing in the franchisor. Compare the cost with what it will take you to start your own business. There is always a huge capital outlay required at the initial stage of investing in a franchise.
Study the Franchisor Critically
Don’t make the mistake the mistake of investing your money in a franchise in Nigeria based on the advice of a friend or family. Carry out an extensive background check on the franchisor before committing your money. Ensure the product or service is what you can actually buy into. That other people are succeeding in it does not entail you will. Find out if what they are selling works for you, if it doesn’t, then you need to back off.
What Kind Does The Franchisor Provide To Franchisee?
Investing in a franchise in Nigeria without knowing the level of support that will come from the franchisor is business suicide. You must ensure that the support you will get as a franchisee from your franchisor is well suited to help you succeed. A good franchisor should be able to provide franchisees with marketing support, site selection support, etc.
Have Good Knowledge Of Your Business Location
In business, location is everything, so you need to get it here no matter what. Your business location can make or mar your business. Before you invest your money in a franchise in Nigeria, ensure that your location is right. A right business location is one that has a high concentration of business customers in Nigeria.
The Length Of The Term Of Agreement Or Renewal
I believe you wouldn’t want a situation where you will be renewing your franchise contract every year. The term of the agreement must be very favorable for you (the franchisor), else you will spend more money than necessary. There are some franchise companies that give a period of time as long as 10 years but the least is 3 years. So, you need to know exactly what you are going into so that you won’t be caught off guard. Make sure you do your due diligence because the longer the better.
Investing in a franchise business in Nigeria is a good way to own your business while leveraging the success of an already existing brand. This business model is as good as the deal you got from your franchisor. In a situation where the deal is favorable, your franchise business has a greater chance to succeed. If you get a bad deal, that is a recipe for failure. You must know all there is to know about your franchisor is you plan to do well in your franchise business in Nigeria. Don’t take anything for granted or leave anything to chance. Have all the details and make your decisions from a logical point of view and not on any other premix.