Once you’ve decided you want to start a business of your own with a franchise, the question becomes: How do I choose the best franchise for me? Related: Everything You Need To Know To Succeed In Business Your investigation of the wide world of franchising, in which a variety of businesses offer various levels of brand identity, support, and training, is the most important part of your purchase. Only with real knowledge can you get beyond the superficial and learn about enterprises that offer the best opportunities to suit your own particular set of skills and interests. The fact is not all franchises are created equal, and some have far better training and support services that can make the difference between success and failure. To ensure you make the most educated selection, your evaluation of the quality of the franchises that most interest you is paramount. (See Part I on Making the Right Choice)
5 Steps To Selecting A Quality Franchise
1. Consult a franchise coach.You can benefit from the expertise of these professionals who have vetted thousands of franchises, eliminating those that are not first-tier, so they can recommend franchises with the greatest chances for success. While you should conduct your own research as well, you should use every resource available to you, and a good franchise coach can save you a lot of time and headaches later on. Best of all, this resource is free.
2. Conduct a review of franchise types.You will find a list of the 75 industries represented in the huge world of franchising at the International Franchise Association website at www.franchise.org. Keep your mind open as you review various franchise types that include tutoring centers, an array of B2B services, fitness centers, storage facilities, as well as the most well-known restaurants and more. You will find opportunities that allow you to work largely on your own, part time or build a multi-franchise operation.
3. Read the Franchise Disclosure Document.All franchises are required by federal law to disclose certain aspects of their businesses. These documents, written in everyday English, can be obtained from the franchises that most interest you. You should zero in on some key nuggets:
- The business history — How long has the franchise been in operation?
- Litigation history — A record of lawsuits would be a red flag.
- Any earnings claims? — though this is an optional item
- Financial statements of the franchisor – Are they solvent?
- A full accounting of your costs, including outlays necessary to set up the business
- A list of franchisees.