Buying a franchise can be a more straightforward path to business ownership for individuals who have capital. Fast food restaurants are among the most popular franchise models. However, ownership opportunities are available across multiple sectors including home renovation, tax prep, chocolate shops, and even businesses that offer sewing classes. The following guide will help you select the most compatible franchise opportunity.
1- Evaluate Your Lifestyle Goals
Owning a franchise can look and feel very different depending on the opportunity you choose. Before investing in a franchise, be sure to evaluate how the opportunity will complement your lifestyle goals. Some franchises require a time investment that exceeds 40 hours per week. You should also evaluate how the business’ location factors into your desired commute.
2- Match Your Existing Interests and Skill Set
Going into business will be much easier if you choose a franchise that is within your current knowledge base and skill set. However, if you want to try something new, you may still enjoy franchise ownership if the opportunity involves one of your hobbies or interests. Where you may lack knowledge and technical training, your enthusiasm will give you patience as you navigate the learning curve.
3- Choose a Company That Has a Proven Track Record
There is enough uncertainty in business ownership. Working with an experienced franchisor who has a proven business model and track record will alleviate much of the unknown. One of the reasons fast food franchises are so popular is they have proven themselves successful for many decades. These businesses often already have established nationwide brand recognition, which will make advertising easier.
4- Compare Franchise Fees
Startup costs vary from franchise to franchise. The franchise fee is a one-time payment franchisees pay upon purchasing their new business. These fees can range from less than $10,000 to more than $100,000. Franchisors use the fees to cover training costs and assistance to the franchisee while opening a new business location.
5- Compare Available Support
Different franchise programs offer different levels of support for new franchisees. If you are tempted to choose a business that has a lower franchise fee, confirm whether you will receive the level of support you will need as a new business owner. People who have experience in the industry in which they will be opening a new franchise location are less likely to need full startup support. However, if you are brand new to the industry or business ownership in general, you may prefer to choose a program that will provide you full support for an extended time.
6- Explore Financing Opportunities
Many franchises offer financing to make startups more affordable. If you require a program that offers full support, but the startup fee seems a little too steep, inquire about financing opportunities.
Starting a franchise is a major decision. Once you have an idea of the type of franchise you would like to purchase, talk to other franchisees so you can learn from their experiences. We encourage you to do as much research as you can before paying a fee.