Want start a franchise business but don’t know where to begin? This is a big decision for any entrepreneur and a lot of thought and planning must go into it. You need to consider several factors before you start a franchise business. These could become the difference between success and failure.
Let’s see what we’re talking about.
Set your goals: This is what it’s all about. Make a list of the reasons why you want to enter this business. What do you expect to get in terms of return on investment or annual income? Most important, do you have the commitment to go the distance?
Identify your investment capability: Estimate how much capital is required and how much you can afford to invest to start a franchise of your choice. Hence you need to know the initial franchise fee, royalty payment terms and other expenses beforehand. You also need to decide if you want to go it alone or rope in some partners.
Know your abilities: As with any business, the success of a franchise will depend on whether you have the requisite skills. Take a long, hard look at your previous achievements and experience and focus on your areas of strength. For instance, you may be good at managing people or a sales whiz or great with computers! To become a franchisee of Subway® chain of restaurants, you need to pass a test in math and English. Choose a franchise opportunity that can leverage your strong points.
Do your homework: Look at the franchisor’s track record before taking up that offer of a franchise. Is the brand doing well? How are franchisees treated? What support services and training resources do they provide? An absolute must do – talk to other franchisees before you make that call.
Understand scope of business: Find out if there are pre-conditions regarding outlet size, operations methodology, restrictions on territory or any other. Know what you can and cannot expect.
Read the fine print: Once you have zeroed in on the franchise you want to buy, ask to see the inevitable Franchise Agreement. The agreement will list out the rights and obligations of both parties, and will govern the terms of your relationship. Be sure to take a professional legal opinion.
Also ask for a copy of the franchisor’s disclosure document, called Franchise Offering Circular. This will help you assess the franchisor’s financial stability and general business acumen and predict if the company is financially capable of delivering its promises. Under the Federal Trade Commission’s Franchise Rule, you must receive this document at least 10 business days before you sign up.
Ask yourself: Finally, ask yourself the following questions before starting a franchise:
- Do I need any start up training?
- Which location is best suited for starting a franchise business?
- What equipment is needed?
- How many people do I need to begin operations? Have I considered all the risks?
Remember, due diligence is essential, and some professional guidance might come in handy. There are a number of sources you could go to for help, like www.great-opportunities.us or www.sourcebookpublications.com . Make sure you know your facts before you start a franchise business.