7 Important Steps To Choosing The Right Franchise
Are you planning to own a business, but you don’t want to go through the hassles of building your brand from scratch? If so, you should consider investing in a franchise. A franchise allows you to acquire an already functional business and become an instant entrepreneur. You may have to invest a substantial amount of money in a franchise. That’s why you shouldn’t take such a decision lightly. There are many things to consider when investing in a franchise. You should make sure the investment is a good one when investing in a franchise. Here are 7 important steps to choosing the right franchise.
1. What Is The Total Cost Of Owning A Franchise?
You should have an idea of the total cost of operating your franchise before you decide to make the move and invest in the right franchise. Without capital, preferably at least $100,000, that you have available or can get a loan for (hint: good credit) than you might want to reconsider.
No one would want to bite off more than he or she can chew. Buying a franchise involves upfront and on-going payments such as the upfront franchise fee, royalty fees, supplies, legal fees, rent, and other operating costs that you will need to agree to pay. Speaking to a professional (you can click here to make an appointment) will give you a better idea of the budget required to get into franchising. Once you have an idea of the total cost of operating the franchise, you can move forward with the next steps.
Here are a few key questions to keep in mind:
. What are your skills, interests, and experiences?
. What did you like best and least about your last job?
. Are you willing to relocate?
. Where do you want to set-up the business?
. Are you good at sales?
. What hours are you willing to work during the initial stages of the business?
. What are your short-term and long-term financial goals?
. Are you prepared to dedicate your time and resources to the new business?
2. Researching The Right Franchise
Once you know how much you have to pay for the franchise and you better understand your skills and weaknesses, you need to research the right franchise opportunity. Trying to do this on your own can be a long and daunting process. There are thousands of different franchise to choose from and luckily we made this super easy with our popular Franchise Quiz™ which you can take to help you filter your search and match you with the perfect franchise in under 5 minutes.
Try to find out as much as you can about the franchise company and the dynamics within it. You will want to get all the information about the potential company from and a professional franchise consultant can help you with that. With thousands of franchise opportunities available out there, you should maintain an open mind when searching for the best franchise for you. That way you can find something that will take off in your market. The internet is a great place to do your research when choosing the right franchise.
A search on Google will give you access to dozens of franchise opportunities in the region or country. All you need to do is to compare the services provided by some of these companies before choosing the right opportunity for you. That way you will know what exactly you will be buying in case you decide to go ahead with the acquisition.
3. Getting Professional Help
Working with a franchise consultant can be the best decision you will make. It will save you time, effort and help you reach your goals with the right opportunity. Working with a consultant is a one-stop shop for help and the best part is that it doesn’t cost you anything.
After you’ve gone through the process of working with a franchise consultant, you will be introduced to work with qualified and experienced attorneys or accountants in the area of the franchise opportunity. That way you will understand all the documentation work and ensure that everything is looking good in the numbers department. This is a good idea in case you don’t feel comfortable choosing a franchise on your own. A professional can assist you in finding the best opportunity on the market. You should be 100% sure that you are getting the best deal in town before you decide to sign the franchise agreement.
A professional can help you by reviewing the franchise agreement and make sure you understand every clause in the agreement. The agreement should be consistent with the verbal agreements between you and the franchisor. It should cover the level of support you plan to receive from them once you sign the agreement. It includes support in hiring staff, training, and legal support. The professional will assist you to amend any clause that might be disadvantageous to you before you sign on the dotted line.
4. Talking With Existing Franchisees
This is a great way to judge how happy you will be with the particular franchise. They will help you understand what happens in the business on a day-to-day basis. Ask if they are happy about the support they receive from the franchisor, what they like and dislike about the franchise, and try to get a feel for their earnings. Make sure you speak to several existing franchisees before you decide to invest in the right franchise. Franchise Business Review is a great online resource for you to get broad feedback from many more franchisees in the industry. Make use of the franchisee satisfaction reports to get an overall feel of the franchisor’s satisfaction rate. This is an important step to consider when choosing the right franchise.
5. Franchise Due Diligence
When you come to this point, you should have a detailed understanding of the franchisor, the industry, how they operate and market the business, and the support levels for franchisees. Don’t be in a hurry to decide without contacting someone at the corporate office of the potential franchisee you plan to invest in. You may want to contact several franchisees for the best results. You should understand that while you are searching for the right franchise opportunity for you, the franchisor will be comparing you to his/her “ideal candidate” profile. You need to do some research about the franchisor – their likes and dislikes – to have a better chance of getting accepted for the opportunity. These are important things to consider when choosing the best franchise opportunity for you.
6. Read The Franchise Disclosure Document
Every franchise in the United States is required by law to provide the FDD. You should read the Franchise Disclosure Document before you decide to conclude the agreement with the franchisor. The FDD was earlier known as the Uniform Franchise Offering Circular. You should read this document thoroughly before agreeing to invest in the franchise. This document will let you learn about the franchisor’s history, marketing programs, training opportunities, royalties, fees, and more. Some franchisors will include earning claims in this document. This is important to estimate your business potential in the long run.
The Franchise Disclosure Document will clearly explain the responsibilities of the franchisee and the franchisor. Reviewing and understanding this document is crucial to the success of your franchise. This document will let you weed out franchises that don’t measure up to your expectations. That’s why you need to carefully read and understand the Franchise Disclosure Document before deciding to choose the best franchise opportunity on the market.
7. Making Your Decision
As with any other major decision in your life, you will be filled with anxiety and excitement when making the final decision to choose the right franchise opportunity for you. You should understand that all of these emotions are normal. But if you have done the homework properly and followed this article, you will be fully prepared to go ahead with the right decision. You will be ready to become a successful franchisee by choosing the right franchise opportunity on the market.
If you are planning to own a business without all the stressors and hassles involved in the process, you should opt for the right franchise opportunity. With hundreds of franchise opportunities out there, choosing the right franchise isn’t easy. Your research plays an important part in this regard. There are many factors to consider when choosing the right franchise.