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Key Steps to Buying a Retail Franchise

Written by: Sebastien Page

Article Overview: Considering that sales from franchises account for billions of dollars in revenue every year, buying a franchise is statistically the safest way to own a business – provided you choose the right franchise.

Key Steps to Buying a Retail Franchise

Considering that sales from franchises account for billions of dollars in revenue every year, buying a franchise is statistically the safest way to own a business – provided you choose the right franchise.

Below are listed seven key steps that will help you choose the best retail franchise for you.

1) Evaluate your interests, skills and financial situation. Consider your interests and skills before you buy a retail franchise. What about owning a retail franchise appeals to you? Are you willing to work long hours – evenings, weekends, and holidays? Make sure you understand your financial situation; it could help you narrow down your options to what you can afford.

2) Check out opportunities. Have you narrowed your options down to those that match your skills set, interest and budget? Ask to see the franchisor's Uniform Franchise Offering Circular (UFOC) and financial statements. Ask existing and former franchisees whether or not they are satisfied with their earnings and the franchisor's performance and support.

3) Research your market. Do you want to open up a golf retail store in your community? Does the market support this decision? If you live in a small town with freezing winters and no golf courses, think again: the presence of a demand for your product or service is essential to franchise success.

4) Location, location, location. The location you choose is critical. For example, if you settle down in an infrequently traveled area far from complimentary business or tucked away at the back of a strip mall, you severely limit your earning potential. The truth is that not all retail stores work in a mall setting, contrary to popular opinion. Always gauge the likelihood of outsiders visiting your store prior to choosing a location.

5) Once you choose a franchise, secure financing. When it comes to financing, there are numerous options, including bank loans, home equity loans and SBA guaranteed loans. Moreover, some franchisors offer in-house financing. Alternatively, you may not need to borrow money for less expensive franchises, such as home-based businesses, and some franchisees charge the fee on a credit card.

6) Attend training and hire staff. You will need training and an operating manual in order to run your business. Generally, franchisors provide training. You may or may not need to hire a staff, depending on your franchise concept. Prior to your opening, you will want to post signs and run an ad advertising openings.

7) Obtain the necessary permits and insurance. You might be required to apply for several federal, state and county licenses and permits. Requirements for insurance vary according to industry. Take a look at the Franchise Agreement for more information.

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Article Tags: bank loans, billions of dollars, buying a franchise, contrary to popular opinion, earning potential, financial situation, financial statements, franchisees, franchisor, golf retail store, home equity loans, location location location, outsiders, retail franchise, retail stores, sba, strip mall, ufoc, uniform franchise, weekends and holidays



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Happy Worker as of Dec 31 2007 - Here's mine... I'm now off to make an offering to the business planning gods for their help in getting to these goals & beyond. To the combined success of Prophets 2 Profits! ----------------------------------------- 1) Corporate a) Retail - Sales reps covering all major markets (1M or more) - Retail product launch plan - 1 more retail release (TBD) b) The Toy Agency - Systems for: o Creative process o Pricing o Manufacturing o Logistics - Marketing agency strategy in place - 1 new customer every 2nd month (5 new customers); 1 of which will be rev of >= 500K/year c) Business - Creative talent pool management strategy & process - Outsourced and/or weekly bookkeeping - Monthly budgeting & forecasting - Better banking organization (Line of Credit, CCs, automate billing for appropriate vendors) - Team total of 5 - Larger office d) Web site - Daily updates - Start of separation of Blog/TTA/Retail 2) Personal - Most weekends “off”! - Entirely separate personal finances; basic personal financing plan - Family….?
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.


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