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In Times of Uncertainty, Look for These 4 Signs of Stability in a Franchise How to tell if a potential franchise opportunity is as steady as it is exciting.


You can't predict the next recession or natural disaster. But the good news is, as a prospective business owner, you do have some control—there are specific things you can look for in your next business venture that signify stability, starting with a franchise and choosing one that's ready to withstand almost anything.

How can you tell if a potential franchise opportunity is as steady as it is exciting? A good place to start is by looking for these four signs of stability:

1. Financial strength.

If you're looking at a franchising business that's in a questionable financial position, your venture may be over before it even begins. To assess a company's financial strength, you'll want to take a close look at their Financial Disclosure Document, or have a trusted accountant review it if numbers aren't your strong suit.

Franchises that are in particularly strong fiscal shape may even offer financial assistance. Kumon, for example, offers a low franchise fee of just $1,000 while covering up to $36,000 in expenses.

Image credit:Kumon

2. Support.

Whether you're an experienced business owner or a first-timer, having a solid support system is critical. The sooner you get through any growing pains, the sooner you're on a strong enough footing to tackle the challenges that may come your way. So when you're looking for a potential franchise partner, be sure to ask direct questions about their support infrastructure:

Do they have a team in place to provide adequate training? Is training all classroom or also real, hands-on experience? Do they offer any guidance when it comes to day-to-day operations and marketing? Can they connect you with other franchisees to answer your questions? Are their franchisees open and willing to share? You want to be able to build an ongoing support network for the future. A strong franchise will ensure your education, guidance and growth starts on day one and continues throughout your tenure.

3. A proven system.

Beyond looking at a franchise's financial strength, it helps to have a detailed understanding of the business' overall track record. Do they have a history of success across the country? What about in demographics like your own? A good place to begin your investigation is by checking independent rankings such as the "Entrepreneur Franchise 500," which ranks franchises not just on their financial strength but on their growth rate, the size of their system and their overall stability.

To quote Entrepreneur Editor in Chief Jason Feifer: "The 500 companies on this list all have something in common: They understand what consumers want now… making our list means they're forward-thinking, nimble and closely in touch with their customers' needs—because in an ever-changing business environment, that's what a franchise must do to thrive."

4. Sustainable demand.

This may seem obvious, but it's worth keeping in mind: franchises with year-round demand as opposed to seasonal demand—such as landscaping or a food truck—give you more opportunities to make money, more margin for error and more security.

However, all year-round businesses aren't created equal. Your prospective franchise should also have positive metrics such as long-term customer retention—who needs a one-off sale, when customers could be using your same product or service over and over again for an extended period of time?

Image credit:Kumon

What makes businesses like Kumon a smart investment is that they have a long consumer lifecycle. Kumon's Math and Reading Program isn't short-term tutoring; it's a long-term enrichment program. Kids start as young as age 3 and often stay through the completion of the program. Even though they may well advance faster than grade level, it will still be several years before they complete the high school-level work. Talk about retention!

Are you looking for a stable franchise that you can also feel great about? Kumon may be just what you're looking for. To learn more about Kumon Franchise, click here or call 844.524.2212.

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