If you’re interested in owning your own business but aren’t sure where to start, a franchise may be worth considering. You can find franchises in nearly every industry, so you have plenty of options. How can you narrow it down and choose the right one for you?
A franchise allows you to be your own boss while offering a proven product/service. Still, you must be willing to put in the effort, so you need to find something that fits your passion and skill set.
In this article, we’ll give you some tips on how to choose the right franchise: things to consider when choosing a franchise, what to look for in a franchise, what a franchise agreement is and how it works, and finally, the benefits of owning a franchise.
Things to Consider When Choosing a Franchise
If you’re not sure where to start, consider the following to help you narrow down your search:
- Outline your personal goals
- Determine what industry you’d like to work in
- Think about your personal strengths
- Decide how active you want to be in your business
- Decide how committed you will be to the business
- Determine how much you are able and willing to invest
What Should You Look for When Choosing a Franchise?
Once you’ve settled on an industry and business model, the next step is to choose a franchise. Here are some things to consider:
How is their support system?
When you buy into a franchise, the brand is established. Take advantage of the knowledge/guidance from your franchisor and use other support systems, such as owners of other locations.
Do they care about your success?
When you are considering a franchise, make sure the franchisor cares about your success/growth. Some franchisors offer to test to determine your mindset and ambition.
How is their professionalism?
As you ask questions, pay attention to how the franchisor handles them. Are they prompt and thorough with their answers? These first contacts are critical to helping you determine how they conduct business.
Do you have the same expectations?
Make sure that you understand what is expected of you and the franchisor knows what you expect from them before you sign the contract. You should think about this deal as a long-term partnership.
What is their approach to sales/business?
Learn more about how they approach things like sales, advertising, and marketing and whether those would be successful in your current market, and if you can afford them.
Check online reviews
Look on social media, message boards, and other places where franchisees share their experiences with franchisors. If the reviews are consistent, it will give you an idea of the business practices of the company.
Franchise Agreement Explained
A franchise agreement is a legal document between a franchisee and a franchisor that outlines all expectations, restrictions, permissions, and obligations of the operation. It also lists the fee schedule that you will pay the franchisor, including the frequency of payments and amounts/percentages.
How does it work?
A franchise agreement gives you the rights to use the intellectual property of the franchisor for a set amount of time. These rights are specific with very little room for error or expansion. The franchisor does enforce these standards to ensure consistent brand representation.
Benefits of Buying a Franchise
When you buy into a franchise, you cut out some of the business development tasks that you would need to do when building a business from the ground up. This is advantageous for those that don’t have experience with starting a business. Some of the benefits associated with buying a franchise include:
- The business plan is proven
- Operational costs are lower than with other businesses
- Most of the marketing is already done for you
- Supply chain/support systems are already in place
- You will grow without having to manage everything
If you are interested in owning your own business but aren’t sure where to start, a franchise might be a good option. There are lots of benefits to owning a franchise, but there are so many options, there is a lot to consider when making your decision. Contact Hemmingway Financial Group today to learn more about becoming a franchise owner.