One of the biggest advantages of acquiring a franchise is that when you do, you get into the business per yourself but not per yourself. A franchise business already has:
- Regional or national brand recognition.
- A solid business plan that has stood the test of time.
- Proven systems for operations, customer service, etc.
With these things in place, it is often easier to get financing and the success rate will be higher than starting a business from scratch.
However, to be successful as a franchise owner, you need to find the right franchise business for you: your personality, experience, and goals. This article will guide you on how to do this.
How To Find The Right Franchise Business In 3 Steps
To find the right franchise business, follow these steps: self-assessment, research, and interview with the franchisor. Here’s what each of these steps entails.
Step 1: Self-assessment
To find the right franchise business, the first step is a serious soul search. When you are honest, you can find the perfect partner that will generate you benefits and personal satisfaction. Here are some questions to ask yourself:
- What are your strengths / weaknesses? Think carefully and write down your answers. After evaluating yourself, ask three of your closest relatives or friends to share their thoughts on your strengths and weaknesses. Do your answers match yours? Is there anything they said that surprised you?
- Where do you have experience? Franchise companies include restaurants, retail stores, hotels, cleaning services, gym and more. It is best to choose a sector in which you have previous experience.
- How are your business skills? How do you deal with the core elements of your business, such as sales, marketing, operations, technology, finance, customer service, and human resources? Where do you excel and where will you need additional help / training?
- Can you follow the rules? Franchise business owners must follow the structure, guidelines and business system of the franchise. As you think about finding the right franchise business, it is also important to consider whether a franchise business fits your personality well or whether it would be best to start your own business.
- How much money can you invest? Evaluating your budget will give you a realistic idea of what franchise opportunities are possible. Initial franchise fees can range from less than $ 10,000 to more than $ 1 million. You want to count the money you will have to pay to run the franchise and the extra money you will need to operate the business (and live in it) while starting the business.
- Why do you want to buy a franchise? Some people want the franchise business to be their main source of income. Others want to buy a franchise as a hobby or hobby. Why do you want to buy a franchise? What are your short and long term goals?
- To what extent do you want to be involved? Another consideration is how much you want to invest in the business in terms of time commitment. Do you want to participate directly in the management of the business on a daily basis? What hours do you want to work? Answering these questions honestly will help you select franchises that fit your lifestyle.
Step 2: Research
The above self-assessment questions can help you learn about yourself and what kind of franchise opportunities are a good combination. The next step in finding the right franchise business is to research the options you have available. Here are some ways to approach your research.
- IFA database: The International Franchise Association has a large database of franchise opportunities to check out here. You can sort the deductibles by sectors (food and restaurants, care for the elderly and health care, cleaning and maintenance, etc.). You can also narrow down your options by location and how much you can invest.
- 500 franchise rating: You can also look for franchise opportunities at Entrepreneur’s Franchise Ranking 500. Browse the list or search by name or category, then click to see your company profile, initial investment, and other details.
- Get help: If you are a veteran or a member of a minority group, you can get help selecting a franchise through VetFran i Diversity Franrespectively.
- Attend events: There are many franchise related events to learn more about your opportunities. The International Franchise Association has one annual conventionand the Exhibition of franchises has events in major cities in the country, such as New York, Atlanta, Chicago, Houston, San Francisco and more.
- Market research: As you begin to reduce all chances to a handful of promising options, it’s time to do some market research to see if the market is promising for your selected franchises.
- Interviews with the franchisee: If you have a short list of possible franchises, you can also consider contacting franchisees in this franchise system and set a time to meet and ask them about their experience.
- Discovery days: A Discovery Day is a special event that organizes a franchise to attract potential franchisees and tell them more about the franchise opportunity. It can be a great way to learn about franchising and compare your options. To learn more about getting ready for Discovery Day, check out this article from Franchise business review.
- Franchise disclosure document: The Franchise Disclosure Document (FDD) provides more information about the franchisor, the franchise system, and the requirements of the franchisee. The FDD is mandatory and includes 23 specific articles, including fees, financing, training, obligations and more. Review it carefully and get help from an experienced attorney to evaluate the FDD before making a decision.
Step 3: Interview with the franchisor
You have evaluated and researched carefully to reduce it to some specific franchise opportunities. The final step in finding the right franchise business is to interview the franchisor to get answers to any persistent questions you have. Here are some questions you may want to ask.
- What are your criteria for choosing a franchisee? Franchisors often have a list of qualifications to select franchisees that fit their brand well. Find out what’s important to the franchisor and determine if you have the requirements.
- What differentiates your franchise from the competition? It is quite insightful to hear the franchisor’s opinion on the brand’s unique outlets and its competitive advantages.
- How do you support your franchisees? Find out what initial training involves and what ongoing support the franchisor offers to help franchisees learn and grow.
- What are your expectations for franchisees? From payments to transactions, it is important to understand what is required of you if you are buying a franchise business.
- How much liquid capital will I need until the franchise reaches equilibrium? Franchisors can share information about the average amount of time their franchisors need to cover costs before the company starts making a profit.
In addition to these questions, you can also ask about the franchise’s history, get clarity about the initial investment and ongoing rates, and know the success rate and revenue potential.
How to Find the Right Franchise Business
The question of how to find the right franchise business is answered in a simple 3-step process, but it is something that should not be rushed. Each step has many components and must be evaluated in depth to find the perfect fit. When you find the right franchise business, everything else will work better. Good luck on your trip!