Tips for Finding the Right Franchise
In uncertain times like these, you might be thinking about expanding your financial portfolio and it doesn’t look the same for everyone. People often define success as how high they can climb on the corporate ladder. Being the boss and making the big decisions is what people strive for and can often be considered the American Dream. Owning your own business is a great way to make those big decisions. Better yet, buying a franchise is a way to do this without the high risk of starting your own company with no support. Franchise ownership comes with a proven business model, training and support, which are just a few of the benefits that come with franchising.
If you’ve considered owning a franchise, it’s important you do your research and ask the right questions to make sure you’re choosing the right one. Read the 10 steps below to get started on finding your perfect franchise opportunity!
Ask the Hard Questions.
Why do I want to own a business? Why would I go the franchise route? Make a list of your goals and dreams, as well as fears to evaluate the opportunities against this list. Are you willing to adapt to an already established business model? Are you willing to work nights or weekends?
Reflect on what you want to stand for.
What are you passionate about? What do you want your brand to say about you? Research different industry categories to get an idea for what type of brand would align with the self-evaluation from Step 1. If you need help getting started, here’s a short quiz to narrow it down.
Assess and secure financing.
Get a firm grasp on your financial situation before you decide what level of investment you are willing and able to make. Find out where you stand in these areas:
- Debt vs. income ratio
- Available liquid assets
- Amount you’re able to invest
- Look into if you would be able to use cash from your retirement fund, or if a small business loan might be a better option
Dive deeper into individual franchise opportunities.
Once you’ve narrowed down to one or two categories you’re interested in, you can start thinking about individual franchise opportunities. As you look at specific concepts, think about the business as it relates to.
- Would the business do well here?
- Are there territories available for this franchise in my area?
- How is support from the corporate team?
- Can I see myself wearing this branded clothing out in public?
Request more information.
Now that you’ve narrowed down the potential franchise opportunity list, take some time to reach out to each company and request more information. Read through their websites, watch any videos, submit your application and talk with their franchise development team. Take the information you learn and make sure it still lines up with what you’ve already determined in the first few steps.
Review the Franchise Disclosure Document.
Once you’ve reached out to the franchise development team and received initial information on the brand, they will send over a Franchise Disclosure Document (FDD). This is required by the Federal Trade Commission, and explains the company’s business model, required fees, what the franchisor will and won’t provide, executive history, any litigation the company has experienced, current franchisee names and contact info, and a copy of the franchise agreement.
This document contains a lot of information, and it’s important to read through it diligently to make sure you know every detail of what you’re signing up for. Ask any additional questions once you’ve read through it.
Make validation calls to franchisees.
The best way to learn about the day to day of owning a franchise is to talk with current franchisees for the brand. You can call as many as you’d like from the list in the FDD. Here are a few helpful questions to ask.
- What’s the normal day to day like as a franchise owner?
- How do you like working with the corporate team?
- What do you think of the brand?
This is a great way to see how the franchisor you’re interested in supports their franchisees, whether the startup costs and projections are realistic, and any other hesitations that you’ve got can be clarified.
Attend a ‘Meet the Team Day’.
Meet the Team Day, or sometimes called ‘Discovery Day’, is a visit to the franchisor’s headquarters to meet with the corporate team. This is a time to ask any and all final questions, meet the team who will be supporting you on a regular basis, and is your opportunity to get a feel for the company culture. This is also a time for them to get to know you, so it’s important that both parties end the day feeling confident and excited about partnering. After all, you might be going into business together!
Make Your Decision.
After carefully going through the previous steps listed above, you’re ready to make a decision.
Make sure you answer those last final questions.
- Can this give me the lifestyle I want?
- Will this franchise leverage my skills and experience?
- Do other franchisees feel happy and supported?
- Is it backed by an experienced and optimistic team who are dedicated to seeing me succeed?
Sign Franchise Agreement.
Did you say yes to all of the questions above? Then it’s time to sign the Franchisee Agreement and head to your first day of training!
Congratulations, you did it! You chose the perfect franchise. Welcome to business ownership and enjoy living out the American Dream.