Owning a franchise can be a great opportunity, but it’s a major investment in time, energy, and money. If you’re looking into your first franchise opportunity, it can be thrilling and intimidating. Here are seven tips that can help guide you in your research.
1- Determine Your Personal Goals
There are many franchises out there. It’s important to find one that aligns with your interests and lifestyle. When considering any business opportunity, it’s important to do some introspection. What are your strengths and weaknesses? How much time or money you can commit to this endeavor? When you are thinking about your desire to open a franchise, what do you hope to accomplish, both in the short term and in the long term?
2- Research the Market
Next, identify the industries or franchises that you’re interested in. Do research on the industry as a whole, as well as your specific geographic area. If you’re still researching multiple options, you can search a franchise directory to view multiple franchises in different industries, locations, and types.
3- Look Up Locations
Consider whether there’s a demand for the franchise’s goods or services in your area. If there is, think about what kind of space suits your business’s needs best. Is there enough foot traffic? Is there enough parking? Also, research the major competitors in your neighborhood, and think about how your franchise or brand can distinguish itself.
4- Read the Documents
For any potential franchisee, the main document that you need to familiarize yourself with is the Franchise Disclosure Document. This covers the financial, legal, and operational details of the franchise. It’s advisable to hire a lawyer to help review the documents as well. You want to be clear on what duties you would have to the franchisor, and what duties the franchisor would have toward you.
5- Evaluate the Costs
Opening a franchise often requires a significant investment. Some of those, such as the initial franchise fee, equipment costs, and supply costs, might be stated in the Franchise Disclosure Document. However, other costs could be important, such as the costs associated with acquiring a location, renovation, and other day-to-day expenditures. It’s important to put together a complete picture of the projected costs to make an informed decision.
6- Meet With the Franchisor
Be sure to have conversations with the franchisor. By overseeing multiple franchise locations, they are likely to have special insight. See if the franchise hosts informational events that give potential franchisees a chance to learn more about the business and ask any pressing questions. Speak to the people that would be your main point of contact as a franchisee. This can give you a sense of how well you might work together.
7- Visit Franchise Locations
Visiting other franchise locations can help you get a feel for the environment. You might be able to glean insights about daily operations. Also, be sure to reach out to the other owners. They can give you practical perspectives on what challenges and support you can expect. Be sure to listen, be appreciative, and ask specific questions. After all, they’ve been in your shoes before.
During the process, be open-minded and practical. Take in the information and take time to yourself to evaluate what makes the most sense for you and your goals. Then, you can move forward confidently.
