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Questions to Ask Before Buying a Franchise

Written by: Michael Hemenway

Article Overview: Understanding yourself and your motivations might be the best place to start when buying a franchise

Questions to Ask Before Buying a Franchise

"Know thyself" should be your motto while you are starting a franchise. There is no point in buying a franchise unless you are clear on what kind of business you want and how much effort you can give in order to find success as a franchisee. Therefore, to help you out, here are some questions that you should be asking yourself before looking at franchise business for sale offers.

"Am I ready to work for myself?"

Unbelievably, many people hate to work on their own! They don't like to take decisions and responsibilities all by themselves. That is why it is very important that you know you can work for yourself. However, a word of encouragement – when you buy a franchise, the franchiser is there with you at every step. You don't have to take all major decisions by yourself!

"Should I go for something I love or something I am good at?"

There are different kinds of franchise opportunities and choosing one concept from them becomes tad difficult. Here, either you can let your hobbies or interests guide you, or let your work experience be the reason of choice. There is a simple way of knowing which one to follow. Just imagine a typical office day. Do you hate going to office and do the same boring job or do you look forward to the challenges it brings in? If it is the former, then let your interest guide you. In case of the latter, let your expertise and experience work for your benefit.

"Do I have the required money?"

If you are very serious about starting a franchise, take a good look at your personal finances. Tally your assets and liabilities and find your net worth. Ask around to see where you can get loans from, if you join a franchise business. You can ask your friends and family members or you can ask your bank.

"Will my family support me?"

Starting a franchise is a decision that will affect all the people attached to you, especially your life partner and your children. They will have to adjust to your new routine. So, make sure they support you in your decision to buy a franchise.

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Article Tags: assets and liabilities, boring job, business for sale, buying a franchise, different kinds, experience work, family members, franchise business, franchise opportunities, franchisee, franchiser, hobbies, life partner, motto, net worth, new routine, personal finances, typical office, word of encouragement, work experience



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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