4 Important Things to Do Before Deciding on a Franchise
January 20, 2017
With almost 800,000 franchises in the United States, this business model is a viable option for many entrepreneurs. In a recent article, Inc. Magazine indicated that economic conditions are right for investing in a franchise. If you are considering a franchise, but have no idea which one to consider, you are not alone. Each year, Forbes Magazine lists the best and worst franchises of the year. There are many familiar names on both lists.
If you have made the decision to open a business, it might be easy to get caught up in the emotion without making a logical, well thought out decision. Before moving forward, be sure you are clear on these 4 things.
Small business owners are deeply invested in their franchise. In most cases, the hours are longer than expected and the costs are higher. When you are choosing a franchise, it is imperative that you find one that aligns with your values and that you will actually enjoy what you will be doing.
Know Your Investment Limits
Each franchise will have investment requirements. Search for one that fits your budget comfortably. There are options in different price ranges. If you have your heart set on a specific brand, perhaps waiting until you amass the right amount of investment will be best. Other options include asking family and friends to make an investment or loan, applying for a personal loan or financing with the franchiser, if available.
Know the Franchise
One of the best ways to find out about a franchise is to talk to other franchisees. Go to another region and speak with the franchise owner. Find out what you can about the process, the positives and negatives. The information you get from someone who has been through the process is invaluable.
Do you have a back-up plan?
It may seem counter-intuitive to go into a new business opportunity with an exit strategy, but that is exactly smart business people will tell you to do. If something happens to you or a family member prior to opening, you need to know what the contract allows and what the cost is to break the contract. Life is full of surprises, both good and bad, so planning for both is in the best interest of both the franchiser and franchisee.
Regardless of which franchise opportunity you choose, having a plan is important. Make a list of the areas of interest. Look for franchises in that area that also meet your budget. Gather information about the business and how well they deal with franchisees. Above all, read the find print.