First, there is no such thing as the perfect franchise for everyone.
Since franchises come in all sizes and shapes, as do potential franchisees, the goal is to make the perfect match — choose the perfect franchise for you. And, frankly, a franchise may not be suitable for everyone.
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So how do you know?
You have to do your research. We can help you get started, but it is worth your while to consult as many experts as possible along the way, including a franchise coach, who can help you narrow down your options to those with the best track record.
One of the very best things about buying a franchise is you have the ability to know everything you need to know before you sign on any dotted line — unlike a business you start from scratch.
With a franchise, you know exactly what it takes to operate profitably, how many employees to hire, how they should be trained, what equipment is necessary, and you get an advertising and marketing campaign, already designed and ready to go.
Your upfront research is probably the most important aspect of the process. Not that you don’t have to work hard to get it all going, but if you make a good match, select a franchise that works well for your own skills and interests, the odds of success go way up.
What To Know To Make The Right Selection
What do you want, exactly?
As perhaps the most difficult question of the bunch, you should get a fix on your goals, your constraints and your personal aspirations. You should know how many hours you want to work. Are days or nights preferable? Do you want to work part time? Do you want employees? Do you absolutely hate sales and so know you won’t do it? Do you like working with people? Do you want to work from home or with others? Do you want a one-person operation or do you eventually want a chain of shops? There’s a franchise for all of these preferences. Deciding what you want ahead of time will save you a lot of time down the road.
What is the franchisor’s business history?
Once you narrow down your franchise search to just a few, a search online should uncover any unsavory newspaper coverage, such as franchisees going out of business at an alarming rate. But to get a more accurate picture of the franchise all in one place, you can find what you need in the franchise disclosure document (FDD), which all franchise companies are required by federal law to disclose to potential franchisees. Get your hands on this document and read it thoroughly!
How much does it cost?
All your upfront costs will be listed in the FDD, from the franchise fee, inventory software, build-out costs, initial training and ongoing marketing and advertising. See Items 5-7.
Do I have enough money?
We highly recommend you consult an accountant to go over whether you have enough to cover your costs to operate. You should plan on a full year to get your business to start operating profitably. You may get there sooner, but it’s safer to err on the conservative side. As you likely know, under-capitalization is one of the leading causes of business failure.
Would franchisees buy this franchise again if they had to do it all over again?
The only way to learn the answer to this vital question is to get out there and talk to franchisees. Visit some nearby and call others by phone. Be respectful of their time, and they’re likely to reward you with invaluable details about their own experiences. You can find a full list of current and former franchisees in the FDD.
Only by doing your due diligence can you make a good match and find the perfect franchise for you — one that will allow you to advance your career for many years to come.
About the author
Ready to make your dream of becoming an entrepreneur come true? Get your free evaluation today! Contact Dan Citrenbaum to help you create the career you’ve always wanted. As a business coach, Dan brings years of experience helping people select and buy a franchise or existing business. You can reach Dan at [email protected] or at (484) 278-5489.
Disclosure: This post is sponsored by a CAREEREALISM-approved expert. You can learn more about expert posts here.
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