So you have been looking at franchises for sale. Did you know that according to the US Small Business Administration that 30% of all independent businesses fail in their first year? Yet less than 1% of all franchises fail in the first year. Pretty amazing, isn't it?
Furthermore, a new franchise opens every 8 minutes in the US. There are more than 8 million people employed by US franchisees. And franchisees in the US produce over $800 billion in annual revenue!
So now that you have made the decision to buy a franchise, which one do you choose?
Here are 10 tips for selecting a franchise.
1) Choose a proven franchise with a lengthy history of success.
2) Make sure that the franchisor has a proven management team and is willing to give you and your team the necessary initial training for success.
3) Make sure that the franchisor is willing and able to be there for you in whatever capacity down the road.
4) Research the franchisor’s territorial rights thoroughly. Make sure there is no overlap between territories.
5) Research the franchisor’s financial strength. Are they outgrowing their means?
6) Try to choose an industry that you are familiar with. If you have no automotive experience, then maybe that automotive repair franchise does not make the most sense.
7) Examine the initial franchise fees and future royalty payments. Does the benefit of owning a franchise outweigh the costs?
8) Talk to other franchisees (and not just ones that are recommended by the franchisor) to get a feel for their level of satisfaction, especially as it relates to ongoing support.
9) Get professional help from your accountant and attorney. Odds are they have seen these type of opportunities before. If your attorney has not, there are many attorneys that specialize in franchise law.
10) Use your gut and do what you think feels right. Do not necessarily believe what every franchisor tells you.
If you follow these ten tips, you will be on your way to selecting the best franchise for you. Good luck!
10 Tips for Selecting the Best Franchise - To learn more about this author, visit Tom Parsley's Website.
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