5 Steps to Take to Find the Perfect Franchise for You

Deciding you want to be a franchisee is a big decision. It’s a sizable investment of both time and money, and finding the right franchise for your lifestyle might seem overwhelming. According to the statistics portal, Statista, there are 745,048 franchises in the United States. How do you find the industry and business model that’s perfect for you? 1851 Franchise has compiled steps you should take to make your franchise dream a reality.

1. Look Inward

Like any career, it’s important to choose a path you’re passionate about. Theresa Huszka, CFE and Senior Consultant at MSA Worldwide says, “The biggest thing a franchise candidate really needs to focus on is what gets them excited. What is it that they can become passionate about? I don’t care how profitable a business is, if you’re not passionate, it’s not going to be a good fit.”

Huszka went on to say, “You should really do some soul searching and find out who you are as a person.” Do you want to focus on a specific brand or industry? How much can you afford to invest? How important is status when it comes to the industry you’re in? Do you prefer to be hands on or do you like managing people? How much money do you expect to make? These questions can help you narrow down the type of franchises you would like to focus on so you make a more thoughtful decision.

2. Do the Research

Now that you have narrowed down your options, it’s time to start the research process. It’s important not to jump on a fad or into an established brand before doing your homework. All franchises have something different to offer and it’s important to look at all of the opportunities available. You can first visit websites like the International Franchise Association or Franchise Gator to see what franchises are in your area and review pricing. You can also attend the International Franchise Expo to learn basic information about the different franchises available. Once you have a idea of what you think you want, it would be helpful to speak to a franchise broker or franchise consultant. They have the contacts and knowledge to help you find the perfect franchise to fit your needs and meet your goals.

3. Start the Conversation

Using the information you have gathered from your research, you are now ready to begin your outreach. Head to the franchise’s website and request more information. To show you’re serious, Huszka even recommends making a phone call. “Picking up the phone and making that person connection shows you’re serious. There are 100s of emails coming in a day but if you’re genuinely interested in engaging with a franchisor, pick up the phone and make a connection that way.”

After you make that initial connection, you will be provided a generous amount of content from the franchisor. Carefully review all the materials you receive, including the including the Franchise Disclosure Document (FDD), a legal document that the Federal Trade Commission requires franchisors to provide. The FDD might seem daunting, but don’t worry, says Sean Fitzgerald, Chief Development Strategist at No Limit Agency*. “If you’ve never seen an FDD before it's intimidating. It's good to keep in mind that it’s designed for the candidate and is broken down uniformly, so all franchises are all the same. It has a great relevant information for the candidates and it has their best interest in mind and they should take time to digest the information.”

4. Do the Research

When purchasing a franchise, it’s easy to fall in love and make an emotional decision. At this point you have done detailed research on the franchise you are interested in purchasing, but now it’s time to learn from new sources. Generally franchisors will provide names and contact information of other franchisees in the FDD. This is a chance to ask all the questions you have been thinking: Did their investment fall in within the range that is listed in the disclosure document? Are they happy with your current returns? How much money are they making? Do they feel good about the decision that they made? These conversations can provide new insight into how the company functions and if they are delivering on their promises.

5. Check Out the Competition

You may think you are ready to make your final choice, but there’s one more step that can solidify your decision. It is likely your new franchise has a couple of close competitors in the industry. Take a look at their business model. Fitzgerald recommends looking at their FDD. “It always helps if you to do a somewhat side-by-side comparison to other brands to help you make your decision. One of the misconceptions of the FDD is people think it's the contract, the contract is an Item in the FDD.” This comparison can answer some important questions. What is their defining difference? What makes them unique? Maybe this difference is something that draws you to that company instead, maybe you think that the franchise you have chosen is strong because of some of these differing factors. It’s important to truly understand your competition so you can come out stronger right from the start.

Once you sign on the dotted line, actual work begins. You will have location scouting, designing, training and more to look forward to as you build your future. Be sure to follow the processes set in place by your franchisor and you will sure to be successful for years to come!