Why all Cruise Franchises are NOT Alike
The business concept may look the same to those shopping for a cruise franchise however, buyer beware. When deliberating the purchase of a cruise and travel franchise careful and detailed consideration of your prospective franchisor is recommended.
A franchise is a hard to beat business model. Home-based businesses fits the bill for many looking for better work-life balance, low-overhead, no inventory and let’s face it- a fun business with travel benefits! What have you got to lose? Well, without careful due diligence of a cruise franchise it may make for unhappy bed fellows.
To ensure a smart decision on which cruise franchise to choose, take your time and ask the right questions. You would never consider purchasing a house by just peeking in the windows and not setting foot inside the door. Here’s a top 10 list of critical topics to explore before deciding on a cruise franchise business:
- Consult a pro: Enlist a CPA and/or FRANCHISE attorney to review the Franchise Disclosure Document ( FDD) and provide their professional opinions
- Check financials: Review with care the financial stability of the cruise franchise. A highly leveraged company will be operating under duress and this will affect your business. Does the franchise pay you weekly or “float” your sales commissions to cover their own expenses?
- Make sure the franchise has no litigation filed against it = Red flag
- Carefully review the cruise franchises’ retention rate as this is key to the success and happiness of their franchisees
- Transparency: Does the cruise franchise publish a “Financial Performance Representation” in Item 19 of their FDD? Be very suspect if the franchise does not share details of their franchisees performance in their FDD. Ask why not?
- Professionalism: Do you like the Franchise Development Specialist assigned to you? Do you feel they have your best interest at heart or are they just trying to push you through and close a sale?
- Limitations: Does the cruise franchise limit where you can market your travel franchise?
- Penalties: Review if the cruise franchise has any production minimums. You will be much more comfortable growing your business at your own pace without a minimum sales production goal with financial penalties attached.
- Responsiveness: If your cruise franchise Development Specialist is prompt and responsive to your questions and concerns this is a good sign of a healthy corporate culture.
- Funded programs: Does the cruise franchise have the financial wherewithal to fund marketing programs, promotions and technology improvements on your behalf?
A cruise and travel franchise can provide a low-cost, low-overhead franchised business opportunity that is fun and lucrative. Follow these simple guidelines to ensure your new venture is nothing but smooth sailing.