Consider if Franchising is Right for You Before Investing in a Franchise
This is an exciting time! You may have decided to invest in a franchise business, but the process may not be as simple as it seems. There are many steps to take before deciding on a brand. So, where do you start?
Is Franchising Right for Me?
The first step in choosing a franchise is to do your research to determine if franchising is for you. A great way to meet franchisors is through trade shows and other industry events. There are also excellent franchise news sites that potential franchise owners can look at. Basic internet research about your market area is also beneficial because that will let you know if there is a consumer demand for the business you want to invest in.
Talking to a franchise consultant is a huge help when deciding to invest in a franchise. Franchise consultants provide prospective franchise owners with information and expert advice to find the ideal franchise. Their guidance can make all the difference and potentially prevent you from making a costly mistake. Owning a small business is a family affair, so speak with immediate relatives to discuss if they’re on board with taking the risk of owning a franchise.
What Franchise is Best for Me?
Now that you’ve decided that franchising is for you, it’s time to pick a brand that you want to invest in and represent. There are thousands of franchises to choose from, so consider your budget, lifestyle, and interests in order to narrow your choices. You also need to think about:
- The type of franchise you want to invest in. It all depends on the type of product or service you wish to offer. The types of franchises you can choose from include home services, education, senior care, childcare and more. In terms of business models, you can have a business that is brick-and-mortar, mobile, or home-based.
- What are your long-term goals? This will help you determine how long you'll be in business, whether to choose single or multiple-unit ownership, and how involved you want to be in the business.
- Do your market research and see what franchise has a demand in your area. Also, consider the choices that are available to you by looking at the Small Business Association’s (SBA) directory of franchises or using the International Franchise Association’s (IFA) interactive search tool.
Talking to a Franchisor
Franchising is great because it allows you to research and vet the business before you dive in. When you’re a potential franchise owner who is talking to a franchisor, there are several questions to ask:
- What are the strengths of your franchise?
- Where do you see this franchise system in five years, and what steps are being taken to reach that goal?
- What competition is there in this field?
- How are you viewed in the consumer marketplace?
This is an important aspect of the due diligence process to see if a brand is a good fit for you.
Questions to Ask Experienced Franchisees
Another important part of the research process is speaking with franchisees who have experience with the brand you’re considering. Questions to ask include:
- How long have you been in the franchise?
- How would you describe your adjustment to this franchise?
- What is your business background?
- My business background is……. Is that a good fit for the company?
- What do you feel is the primary function of the owner of this franchise business? Please describe a typical day.
- Are you putting in a full-time effort?
The brand that you invest in should be a reflection of your skills and something that you are proud to represent.
How to Become a Franchise Owner
The future is bright for franchising, and industry experts predict that the best is yet to come. According to the IFA, 792,014 franchise establishments were responsible for almost 8.5 million jobs in 2022. Franchising's impact can be felt throughout the entire economy. Before leaping into franchise ownership, you should do your due diligence by attending conferences and trade shows and speaking with your family and franchise consultants. Also, consider your long-term goals and ask questions of franchisors and franchisees to get a better sense of particular franchise brands. The only one stopping your from entering the booming franchise industry is yourself.