Bad Franchises

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What to Look Out For When Buying an Internet Franchise

By and large the franchise industry is full of excellent opportunities to run proven businesses and in all but a very few cases these franchises are there to expand their existing brand and push to have nationwide coverage. However, with the Internet becoming the global phenomenon that it has over the past ten years, with it has came a new type of franchise, one that is based solely on the Internet.

Although there are of course many successful ways of operating a business on line, there are some internet franchises you have to watch out for and below are a few reasons why.

1. In many cases, in fact at least 80% of the internet franchises I have looked at, the opportunity has been set up to be an opportunity and has not ran itself as a successful standalone business. The essence of franchising is that you are expanding an existing tried and tested method and many Internet franchises have failed to follow that “essence of franchising”. Although there are successful Internet franchises based around the 2made to franchise” model, there are also many which quite simply cannot meet the promises made in their promotional materials.

2. Many are multi level marketing schemes masquerading as a franchise. These you have to be particularly wary off, quite simply they sell you a method which in turn is just a document on selling the same method on to someone else. You will get a standard template site, a pdf ebook and a pdf marketing plan which simply documents how you can sell the same package on. although not usually a pricey “franchise” you will find that they are a complete con, conning you and conning the next person that buys it from you. Anything that smells of MLM, run a mile from.

How to tell a good Internet franchise.

There are some tricks to identifying an opportunity which is likely to be profitable and keep their promises made in their promotional materials. There are several tools online to help you with this and below are some ways of identifying them.

If the Internet based franchise relies ion website traffic then:

1. check their own sites alexa ranking. This will give you an idea of how much traffic their own site is generating. Alexa works like this. The most popular site on the internet will have a low ranking of 1, the least popular of several million, the 1 means it is the most visited website on the internet, the several million means it is the, example, 23rd million most visited site on the internet. Anything less than 1 million means they are getting half way decent website traffic. anything under 200,000 means they run a busy site and anything under 100,000 means they are very very good at what they do. If the franchise you are looking at is based around Internet traffic yet their alexa ranking is several million then they are not doing very well themselves so how are you expected to do well if they cannot?

2. check their Google Page rank. All sites are given a page rank by google, most small to medium businesses had a page rank of 2 or 3, well establishes sites 3-5. If the site you are looking at has a page rank of 0 or 1 it means they have not been doing much Internet marketing and like the above points, if they cannot market themselves how are you supposed to do it?

My issue with Internet franchises is simply that there are so many which seem to fail. There are of course many good ones, CityLocal for example is a fantastic franchise with a track record of success, however there have been dozens of franchises trying to emulate what CityLocal have done and they have all failed, taking their franchisees down with them. CityLocal is not the only decent internet franchise out there of course and there are many others, again though it’s a case of weeding the good from the bad. the trick is in the research, ensuring you contact the existing franchisee base and do your on line research well will help you choose a franchise which is profitable and successful in its own right and likely to succeed for you too.

About the Author

Matthew Anderson is a franchise consultant and founder of The Franchise Shop, a UK business franchise directory featuring
internet franchises
UK franchises

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