Owning a franchise is a long term commitment. Ask specific questions about ongoing support and terms of the deal. There are franchises in almost every industry, so you have a variety of options. The following will help you if you are an entrepreneur that is thinking about buying a franchise but unsure about which one is right for you. If you have no idea where to start, these questions will help with your search.
Why Do You Want To Become An Entrepreneur?
By figuring out your actual goals, you will be able to determine what franchise is a good fit. Do you want to make money, maybe you want to change careers and spend more time with your family or maybe you want to just try an entrepreneurial step in your career.
What Are You Good At?
Examine your skill sets, what you’ve acquired in your previous professional experience, and what you’re comfortable with. Are you comfortable with sales and cold calling? Do you like interacting with customers behind the counter of a retail location? Can you manage people? Do you like being out in the field working with clients and customers, instead? Franchises aren’t limited to fast food and coffee shops. Nearly every business structure has franchise availability. The most successful franchise owners do the work they like and look to outsource functions that they may not be good at or do not have the time to complete.
What Role Do You Want To Play In Your Franchise?
Do you want to be an absentee owner and hire staff to manage the business or do you want to be directly involved? The key question is what do you see yourself doing on a day to day basis. Some franchises offer a hands-on opportunity while others offer more of a management opportunity. So your decision is do you want to work each day, do you want a specific job each day or do you just want to lead an organization and manage managers?
How Much Money Do You Have To Invest?
You might have an idea of what type of business you want to get into, but taking inventory of your capital will give you a realistic sense of what franchise opportunities are possible for your budget. Like any business, you shouldn’t expect to be profitable right when you open your doors, so make sure you have enough money to live off of while you get off the ground. Franchise costs vary greatly depending on the industry and specific business model. Some upfront fees are less than $10,000 while others can be up to $1 Million. It is up to you to decide how much you would like to invest and what will help you achieve your goals long and short term.
Time To Choose A Specific Franchise
One of the biggest benefits of buying into a franchise is that the brand is established. Make sure the franchisor is available to guide you with efforts such as marketing. Follow the franchise model. Make sure the franchisor cares about your professional success and growth. You should be clear on what the franchisor expects of you and vice versa . Ask the franchisor about their sales and advertising approaches and whether they will work in your marketplace. Consider attending franchising industry conferences, such as the International Franchise Association Annual conference. It is a great way to identify and compare your options. Look for a franchisor that will be a true partner. A franchise disclosure document details the obligations a franchisor has to a franchisee. This document must be provided to franchisees before any money is exchanged. Be sure and read the entire FDD thoroughly.
Before You Start Your Franchise, Know What Your Exit Strategy Is Going To Be?
Are you planning to leave the franchise to your children, are you looking to sell it or do you plan to just run it for a couple of years and then get out? Many agreements are multiyear contracts. While some are as short as five years or as long as 25 years. The average length of a franchise agreement is 10 years. It is difficult to exit a franchise agreement so be sure to know you are committing to a long haul. The better you know and understand your end game, the easier time you’ll have selecting the right kind of franchise opportunity, which fits you in the short term, and supports your long-term objectives.
Running a franchise can be a great way to start running your own business, but you need to understand why you are getting into it, what you are getting into, whom you’re getting into it with and of course how you plan to get out of it. The better you understand the answers to these questions, the better your probability of selecting the franchise segment and company with the best potential for you.
Contact Aaron (608-576-4592) for a Free Consultation!
About Aaron Bakken
Franchise Consultant for The Franchise Consulting Company
Aaron has 20+ years of franchise and independent business ownership experience. He also spent 5 years as the VP of Franchise Development for an international franchise group, growing the franchise to the advent of a private equity buyout. Whether you are looking to buy a franchise opportunity or franchise your business, Aaron knows how to guide you.
No Cost To You
Aaron is paid by franchisors and development companies for bringing them viable franchise investors. So frankly, his clients have nothing to lose by engaging with him but a bit of their time. Aaron helps his clients navigate the complex world of franchise ownership and development, and provides long term guidance to help his clients achieve their entrepreneurship goals.