If you are looking to start your own business, you have probably thought about franchising, as a way to get an already tested product or service, and skipping the process of establishing a new brand. In exchange for paying for license and royalty fees, the franchisee receives the rights to use the franchisor’s trademarks, production processes, and proprietary knowledge, and to profit by selling products or providing services under the franchisor’s name. Considering the great number of franchises in different industries, your options are abundant. However, this can make choosing the right franchise for you a difficult task. Below are some tips and questions to ask yourself to get you started in choosing the best possible option for you.
Consider your personal goals
People look to get into business for different reasons. Defining the type of franchise which will help you achieve your goals, whether it is short-term profit, the ability to quit your job or dedicate your time to a career as an entrepreneur, is the first step you should take. It is important to be sincere with yourself and self-conscious about your abilities and personality, as well as what you are trying to accomplish, in order to make the right decision.
How much money are you prepared to invest?
Taking the money factor into account will give you a realistic view of what franchises are available to you and narrow down your choices by eliminating those which you can’t afford. Taking into account all expenses associated with running your new business is crucial, as they can include different additional costs, depending on the type of the business, such as rent, supplies, royalty payments, etc. You should also consider that your business will require some time before it starts generating revenue, so you should have enough funds set aside to get through those first couple of months. Be realistic with the amount of money you have available, and look for franchising opportunities accordingly.
Research successful franchise businesses offering good support
Investing in thriving businesses which rely on franchisees to expand can be a great way to become an entrepreneur. Such companies usually provide you with a lot of support, including management, marketing, and providing training, and will be there to help you on your way to success. The support you receive from the corporate headquarters can make your life as an entrepreneur much easier, and should be one of the priorities to look for when considering franchises. If you are comfortable with being a part of a large team, take your time to search the internet for franchises such as the Chatime franchise, to find opportunities which match your abilities and needs.
How do you want to be involved in running the business?
You basically have two options here. You can either work in the company yourself, if you have the time and skill set, or you can hire people to run the business for you. Are you looking to assume the role of a manager, a sales agent, or an absentee owner? This is an important factor to consider if you don’t want to quit your regular job just yet, and it will further narrow your search, since some franchisors demand more direct involvement than others. On the other hand, if your plan is to be an owner-operator, you should look for franchises which can offer you this opportunity.
If you are uncomfortable with doing all the research and choosing a franchise entirely on your own, you should consider consulting franchise brokers. However, you should know that there are two types of franchise brokers you may find yourself talking to. The first type includes consultancy firms which help you search for different available franchises, eliminate those which are unsuitable for you, and match you with those which meet your preferences. They provide you with their services for a fee and are not involved with the sale of any franchise. The other type are franchise salespersons. Although these brokers won’t charge you fees for their services, you should keep in mind that they make a living through commissions from franchise companies when they match them with a buyer. Hence, they are likely not to have your best interest in their mind, and instead try to match you with the franchisor who offers the best commissions.
Whether it is your plan to resell the franchise or stick with it as your main source of income, the franchise you decide to buy will affect you in the long term. Hence, it is crucial for you to find a franchise operating in business which fits your interests. Furthermore, before investing your money, you should make sure that the policies and rules of the franchisor are acceptable for you, as you will need to adhere to them in the future.