If you’ve always dreamed of owning your own business but have concerns about the uncertainties involved in striking out on your own, franchising can provide a supportive and structured opportunity that can turn your dream into reality. However, choosing the right franchise will have a lot to do with whether a business venture flourishes or fails. The following are seven things to consider when choosing a franchise:
1- Personal Passions
As with any other type of business venture, following your personal passions when you purchase a franchise helps ensure that you’re interested and engaged. Choosing something that doesn’t align with your interests and/or values is a sure recipe for burnout at some future point.
2- Financial Viability
Before beginning your search for the right franchise, it’s essential that you carefully and thoroughly asses your current financial condition. Determine how much available capital you have, and be sure to allow yourself plenty of wiggle room for any financial emergencies that may arise. Additionally, research the initial costs of the franchise and any ongoing fees that may be involved.
3- Market Research
The next step is to determine the financial health of the franchise or franchises that you are considering. Research the demand for the franchise’s products and/or services in your location, analyze the target audience, and investigate any competitors that may be operating in your area.
4- Franchise Reputation
The general reputation of the franchise should be a key component in your decision. Look for an opportunity with a good track record, plenty of positive customer reviews, and a solid presence in the communities where they’re located. Consider reaching out to current franchise holders to ask about their experiences and opinions.
5- Available Support and Training
A good franchise considers new franchisees to be investments in the overall success of the parent company, and for this reason, they typically provide comprehensive training, marketing assistance, and ongoing support. Even though independence and entrepreneurial spirit is necessary to succeed in any business, franchises included, the support many franchises offer can be invaluable — especially to those new to the industry. Tread carefully if a franchise you’re considering seems lacking in this department.
6- Legal Considerations
Carefully review the franchise agreement and other legal documents, taking care to make sure that you understand the terms and conditions. Be sure to keep a sharp eye out for small print. Typical concerns and conditions include royalty fees, territory restrictions, and renewal options. Don’t be afraid to ask for clarification on anything that you don’t understand. For an extra layer of protection, hire a franchise attorney to comb through the documents for anything that you may have missed or misinterpreted.
7- Growth Potential
The real worth of any franchise lies in its growth potential. Evaluate whether the franchise can adapt to evolving market trends, conditions, and consumer preferences. Additionally, determine whether opportunities for future diversification and/or expansion exist.
Keep in mind that choosing a franchise is a substantial commitment, so don’t skip any steps when it comes to doing your due diligence. Don’t let yourself be rushed into anything — fast decisions can lead to regrets down the road.
