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Forbes: What to Consider if You’re Thinking of Opening a Franchise

Founder and CEO of SMB Franchise Advisors Steve Beagelman shares the top considerations for people looking into franchising

In a recent Forbes article, Founder and CEO of SMB Franchise Advisors Steve Beagelman shares insight into what potential franchisees should be thinking about before making a career jump. During times of a global crisis, the franchise industry typically performs quite well. More people consider putting their career and income into their own hands, and there’s more interest surrounding business ownership. Franchising is the perfect alternative to starting an independent business, because it's backed by an established brand and support from the corporate level.

“A brand-new business carries with it a lot of risks,” Beagelman told Forbes. “In addition to the usual set of challenges, small business owners now need to consider PPE, employee protections, safety procedures and more. One way that business owners can offset that risk is by joining a franchise brand. As COVID-19 continues to impact small business, aligning with a proven brand can guide prospective owners through support, marketing, access to specific resources and leadership. When owners are part of a franchise system, the franchisor — and an established network of franchisees — are all there to support them.”

Potential franchisees should still do their homework when comparing different brands. Here are some tips from Beagelman on what to consider when looking for a franchise opportunity:

Choose Something You’re Passionate About

Beagelman suggests figuring out what it is that makes you want to get out of bed in the morning, what excites you and what you love in life. From there, find brands that align with those passions. You should pick a brand that would be a natural fit in your life and that you could envision yourself committing to every day. Sometimes landing on a brand can be the most difficult part of the process. 

Get to Know the People You’re Getting into Business With

“When you buy a franchise, you’re not only buying the name and concept, you’re also buying into the practices and procedures that the franchisor has perfected over the years,” Beagelman told Forbes. “It’s crucial to have a face-to-face (or Zoom) conversation with the folks you plan on getting into business with. Learning about the brand’s values and vision for the future can help make or break a franchisee’s decision to move forward with a brand.” 

Find out Where the Available Territories Are

You’ve found a brand you’re passionate about and your values align with the brand. For the next step, it’s time to figure out if there are territories available in the area you’d like to operate in. Beagelman encourages franchisees to think beyond a singular location. Ask about expansion opportunities and development. In some cases, bigger brands with a well-known name and greater marketing support may not have as many territories available in your area. Startup franchises, on the other hand, could give new franchisees the opportunity to grow with the brand close to home.

Evaluate the Costs

The two most important figures franchisees need to consider are the startup costs and the ongoing royalties. Startup fees can be pricey, sometimes reaching upwards of hundreds of thousands of dollars. Royalties are a percentage of sales paid from the franchisee to the franchisor. Once you are comfortable with the investment, you’ll need an attorney to review the franchise disclosure document (FDD) to explain exactly what you’re getting into. 

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