So, you’ve decided you want to become a franchisee. Before you sign on the dotted line, make sure you’re buying into a franchise concept that is right for you.
Unfortunately, there isn’t a one-size-fits-all franchise opportunity, and each and every franchisor will be different. It’s important to make sure you’re deciding on what fits your lifestyle so you and your new franchise will thrive.
Below are some tips and tricks that will put you on the right path.
Learn what a franchise is.
First and foremost, it’s important to understand what a franchise is before you buy into any concept. According to the International Franchise Association (IFA), a franchise can be defined as “a method for expanding a business and distributing goods and services through a licensing relationship.”
The IFA further explains the concept as a franchisor (the person or company that grants the license to a third party for the conducting of business under their marks) not only specifying the products and services that will be offered by the franchisee (a person or company who is granted the license to do business under the trademark and trade name by the franchisor), but also provide them with an operating system, brand and support.
In a franchise, you will own your own business under the umbrella of the franchisor. If working under the guide of another business is not something you’re looking for, franchising may not be the best choice for you. If you’re looking to own your own business with the advice and support of a proven system, you’re on the right track.
Know what works for you.
When it comes time to find a great franchise fit for you, it’s important to look inward and make sure you’re making the best decision based on your wants, needs, and skills. Figure out how much time you want to dedicate to your franchise. Will this be a full-time job for you, or are you looking for more part-time opportunities? You need to know how much you have to invest. It’s important to figure out how much capital you have and make a decision that fits your budget. Speaking of financials, it’s equally important to know how much risk you’re able to assume with this business purchase. You won’t want to get into something that could potentially harm your financial future if things don’t work out for whatever reason.
Figure out what you want to do. If you’re running your own business, you should make sure it’s something you will love.
Narrow down your options.
Knowing what you’re looking for in a franchise will help when it comes to narrowing down your options. If you just jump into the franchise pool, you will find there are thousands of opportunities out there in many different fields. You can find a franchise in automotive, business services, residential services, education, lodging, fast food, real estate, retail, medical services and much more. By figuring out what you’re passionate about, you can narrow down your options.
Once you know what type of concept you want to get into, make sure to check out as many brands as you can that fit your criteria. You don’t want to just jump right in. Find out if the franchise is available in your market. Look at the support system they offer. Make sure you want to join the team.
While looking for your new franchise concept may be fun, it’s important to give yourself a deadline. You want to make sure you’re making proactive steps and not just spinning your wheels.
Do your homework.
You’ve finally found a few franchise concepts that feel right to you. Well, the work isn’t over yet. It’s time to do your due diligence. Make sure to really sit down and read the franchisor’s Franchise Disclosure Document (FDD). This will be your best friend when it comes to finding a franchise. The document will run about 100 to 150 pages and contain a lot of information. Make sure you’re allocating an appropriate amount of time to studying it.
According to the Federal Trade Commission, you should use an FDD to look into a franchisor’s background, litigation history, initial and ongoing costs, restrictions, termination, training, advertising, current and former franchisees and more.
Ask an expert.
Always remember: You don’t have to go it alone. In fact, not taking advantage of industry expertise would be foolish. If you’re having any difficulties looking for the best franchise concept for you, there are resources out there that can help you find your perfect franchise fit.
Services4Franchising is on hand to help you find the ideal opportunity for you.