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Choosing a Franchise

Written by: Sebastien Page

Article Overview: If you’re thinking about going into business as a franchise, here are 6 steps to picking the right one for you!

Choosing a Franchise

If you’re thinking about going into business as a franchise, here are 6 steps to picking the right one for you!

1. Assessing your personality: Before you pick a franchise to go after, think carefully about the kind of business you want to run and how your personality fits into that. Make a list of your strengths and weaknesses as a business manager. Think about everything from your experience to your attitude about work. Then plan out what you want in a franchise based on your personality, from the hours of work to the possibility of relocation.

2. Researching the company: Spend a lot of time on this step, because it is very important. Find out about the profitability of companies you are interested in buying a franchise from. Research their financial details, and find out if they plan on and are able to expand more. Finally, think about what kind of demand is available for their products.

3. Questioning the franchisor: Once you have narrowed down which franchises you are most interested in pursuing, it’s time to get tough with them. Question the companies about how they run their franchises and what kind of policies they have. Find out about franchisees that have gone out of business or quit, and see if you can contact them to get a better picture of whether or not this is a company you will want to work with. Then, ask about current franchisees and call them up or visit them. Find out what they think of the company and how supportive the company is to its franchisees. They should also be able to tell you something about why they picked this company and if its image and quality is up to par.

4. Investigating profits: Find out what the profits are going to be like for the franchisors that you are most interested in. Some franchises are profitable right away. Others require more patience. Refer to your earlier assessment of your personality and attitude towards this aspect of the business before selecting a franchise.

5. Considering the market: Even if a franchise seems perfect for you, don’t jump on it without getting a good idea of what the market is like where you plan to set up shop. Many products are more or less successful depending on geographic location and demographics. You want to make sure there is a big base of customers where you start your franchise for your product, so conduct some market research. Find out if the culture and region you plan to start your business is interested in the products your franchise will sell.

Similar businesses in the area may tell you that you are in the right place for your customers. On the other hand, the market may be saturated and there may be too much competition in your location, or even overall. Find out if the industry the franchise you have selected is growing.

6. Understanding the contract: Before signing anything, make absolutely sure that you understand the franchise agreement contract. It is a very good idea to hire a franchise lawyer to help you make sure that you are getting everything you want from the franchisor, especially profits and your rights. The franchisor should also most likely be offering lots of training and support for you and your employees.

Related Articles
  Selling to Hostile Franchise Buyers is Never a Good Idea
  Which Franchise is right for you How do you choose
  Top tips for franchise success
  Why You Should Work With a Franchise Consultant
  Questions to Ask Before Buying a Franchise

Article Tags: attitude, business manager, buying a franchise, financial details, franchisees, franchises, franchisor, franchisors, patience, personality, profitability, profits, relocation, strengths and weaknesses



Related Forum Posts
Re: Enticing Franchises - Top 9 List - All Franchise listed above are in millions of dollars. Do you have the list of Franchise in thousands
Re: Info for would be franchisers... - [quote="Sebastien":1d29sdv1]Like Franchise Times, Franchise Update is a very practical magazine. There is no blah blah, just straight facts that anyone in the franchise community can relate to. I just want to mention that all these magazines are NOT franchisee oriented. I mean these magazines are for franchise professionals. If you're looking to buy a franchise, you won't find much information in there. To answer your question, getting published in Franchise Times was fairly easy. I don't want to brag too much but I think I am known in the franchise industry. I was the marketing guy at Franchise.com for a few years before joining my new company, the World Franchising Network. So people know me and I have a very good relationship with Nancy Weingartner, the Managing Editor at Franchise Times. I was talking with her at the last Franchise Expo South in Miami and she mentioned she'd like me to be profiled. I was like "ok, sure!". I like this franchise executive profile thing in Franchise Times as it is rarely BS. People are usually really natural in there.[/quote:1d29sdv1] Thanks for the follow up Sebastien! And I can't say that I'm surprised that networking with the right people and managing your relationships with them properly are the keys to being published. I guess the old adage holds true of "it's not who you know, but who knows you" that's important.
how much for a franchise fee? - Dear Colleague There is no easy answer to this question. Things to consider: [list=] The sizeof the Franchise Clent base Expected Turnover Intellectual Property costs (recoup) Number of Franchises Number of employees Original Set up costs Franchise admin costs An example: A franchise that I was involved in setting was to a simple "lawn mowing/home repair" franchise. The Franchise included national/local advertising - preparation of client lists - general admin - central accounting etc The Franchise involved 300-500 clients - and an annual turnover of about $300,000 . The annual franchise fee was $30,000. Hope that this gives you some idea Take care Ian[/list]
Re: Franchise Surveys - Another good tool to researching a franchise is to speak with their existing franchisees. This contact information is included in most Franchise Disclosure Documents. In order to get a Franchise Disclosure Document or FDD as it is often referred to, you will have to complete a basic franchise application. The franchisor will then usually provide you with the FDD at that time. Included in that book of information is a list of the existing franchisees, the contract, the investment information etc... This information is required by Federal Law to be disclosed to your prior to making a purchase. So be sure to do your research and start with the Franchise Documents to get the initial information.
Re: Info for would be franchisers... - [quote="Sebastien":2gam0klq][quote="BuzzAroundBooks":2gam0klq]Like Franchise Times, Franchise Update is a very practical magazine. There is no blah blah, just straight facts that anyone in the franchise community can relate to.[/quote:2gam0klq][/quote:2gam0klq] That is really what I look for in any industry publication. We lead busy lives and when people fill their magazines with fluff, not only does it benefit no one, but it makes us truly appreciate those that don't. Thanks!


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