Many consider owning their own business to be the ultimate dream. Buying a franchise is an excellent opportunity for those looking for more freedom and flexibility. However, it’s not something you should simply dive right into without giving it some thought.
Many people assume that all franchise brands are the same and come with stable systems and brand recognition, but the reality is that there are around 4,000 franchise brands for sale today in the U.S., and not all of them are great. A salespersons’ job is to sell you a franchise – and make it look good even if it isn’t. It’s your job to look beyond the sales pitch to determine whether or not the franchise is going to deliver on those things that you want in a business, thus creating a solid foundation for a successful future.
Top 5 Things to Consider Before Buying a Franchise
As a potential buyer, there are questions you should ask yourself before making a purchase. No two franchises are the same, and you want to make sure that it is the right one for you when investing in a business. Additionally, there are other factors to consider when determining whether the franchise you are interested in is successful or not.
1. No need to Reinvent the Wheel
When considering small business ownership, particularly where franchising is concerned, you shouldn’t need or want to reinvent the wheel, so to speak. This is something to keep in mind both before and after you’ve made your decision. So many people want to make changes to the franchise right when they start out. Learn first and make micro adjustments over time is a better strategy
If you have a franchise with a successful business model, there is no need to go out of your way to change things up, after all, that is what you paid for in the franchise fee. Finding that you might want to change how the franchise is run before you buy is a good thing. Don’t change what’s already working, and if it isn’t already working, then look elsewhere, this one isn’t the right one.
2. Do You Have a Good Support System?
While a franchisor that provides an established foundation and a good working support system is a key factor to consider. Running a business is not easy, even one that already has a methodology in place and a process to follow.
It’s essential to have a personal support system to help you through the process. That is why they say in franchising “be in business for yourself but not by yourself”. Identifying who the support people are going to be at the corporate office, as well as, your peer franchise owners during your investigation is critical to a successful selection process. Before buying a franchise, it’s helpful to identify the support you have or will need.
3. Is the Franchise Brand Valuable?
It is up to you to determine the value proposition that the franchise will deliver. Does the franchisor actually do those things you think that it will do for it’s franchise owners? What is the quality of the business model you plan to follow? These are all things to consider when looking into a franchise.
Just because something sounds good in a sales pitch doesn’t mean it performs well in the real world. You want to find a brand that is a good fit for you, it is critical you ask the right questions. You’ve also got to think about longevity and how long you plan to own this business. Something that is in high demand now won’t necessarily be popular ten years from now. What is the lifespan of your business? What is your exit plan?
4. How Robust and Stable is the System?
What are internal operations like? Does the franchise offer a proven business model with solid structures and systems already in place? It’s important to look at how a franchise is structured and run. The question is – can I make more money, faster as a franchise owner than doing this same business as an independent? The product or service may be in high demand, but it can make your life difficult if the internal structures are a mess. Consider the other franchises – are the owners and employees satisfied, or are they struggling to stay afloat? While there will always be some effort needed on your part, you want a franchise with a proven track record of success with methods and systems that are laid out for you.
5. Is the Business Right For You?
You shouldn’t pick just any franchise, even if it is a successful one. A good business for one person doesn’t always translate to a good business for you. Finding the right fit is about thinking about how you will interact with the business, what is your role as the owner? What are the things you want to be doing in the business and what are those things you want to hire others to do? Before buying a franchise, be sure that it’s something you will enjoy being a part of.
Consult With a Professional
While franchising provides a clear path towards running a successful business, there are still often challenges you will face, both before and after you’ve decided to purchase. Of course, running a franchise is not impossible and can be a wise investment for those looking to create a consistent income stream or financial freedom. There are many things to think about while investigating a franchise, it can help to consult with a professional to help guide you through the process.
If you’re considering buying a franchise to invest in a more flexible and financially stable future – connect with David to learn more about the process and how franchising can work for you.