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Franchising - Frequently Asked Questions
What are the Dos and Dont's of Buying a Franchise?
Suddenly for whatever reason, the idea of being your own boss, taking control of your own future, has become obsessively irresistible. You feel like your life is passing you by. You're stuck. You're in a quandary. You're hungry for success and you're not sure what to do. You've learned that success in your life is largely dependent on making smart choices.
Most important decisions you'll make in your life are tough and complex. You dread making these decisions because they almost always come with a degree of risk. Buying a Franchise is certainly a life changing decision involving complex considerations that will require you to focus on what you want your life to look like. What's important to you?
With that in mind, below is a check list to buying a franchise. The checklist is not exhaustive, but provides a good basis for a good decision that will increase the odds of your success in franchising.
CHECKLIST TO BUYING A FRANCHISE
DO use a franchise consultant. Franchise consulting services are free. Your decision should get you where you want to go. A good franchise consultant will help you specify your objectives. Knowing what your near term goals are and what you want your future to look like will help clarify your decision. A good franchise consultant can help you see the near term solution and the big picture.
DO orchestrate a viable business plan. This is the foundation of your franchise. Most successful franchisees follow the franchise system. Nevertheless, you should have a vision of what you want your franchise to look like. How are you going to promote your franchise? What's your sales strategy? How do you monitor and maintain excellent customer service? What's your policy for hiring and retaining excellent employees?
DO an audit of your franchise compatibility and suitability. Franchising, owning your own business is hard work. Are you, your spouse and your family supportive of the decision and are you ready to make the sacrifices in the way of money and time in order to fully commit to a franchise business? Do you and your spouse have the business skill sets compatible to the franchise business you want to own?
DO a financial audit to assess your financial resources. Get a clear understanding of your risk tolerance. What is your comfort level for your investment? How do you intend to fund your franchise? Home Equity Loan or a Small Business Loan? Do you have enough liquid cash resources? Do you have enough savings to fall back on while your franchise business develops?
DO research and evaluate your options. A franchise consultant will help you ask all the right questions and get the answers you need. Does the product or service you propose to sell have a market in your area? Franchise owners know their industry. What's the market’s potential? What are your margins? Who are my competitors? Most important, who is my customer?
DO hire an experienced franchise attorney. He should be familiar with industry franchise agreements.
DON'T make your decision too quickly, or too slowly, or too arbitrarily. Remember most of us don't get trained to make decisions. It's not what you decide, it's how you decide.
DON'T assume anything. Take control and be proactive in seeking what you want. Stick to your core values and beliefs and the needs of your family. Don't just sit back and watch what comes your way. Think about your long-range goals.
DON'T ignore your current situation. What is it about your day to day life you don't like? Why are you considering a change? Will buying a franchise solve the problem?
DON'T ignore certain sacrifices you will have to make. Being your own boss typically means he loss of fringe benefits and retirement plans. You'll need to determine what is more important to you and your family. If the dream of franchise ownership worth what you're giving up?
DON'T obsess over your decision. Know when to quit looking. The perfect franchise solution seldom exists. It's important to be careful and thorough in laying out your objectives. Once you've made your decision apply your energies to developing your franchise.
Lastly, work hard to build a good relationship with the franchisor. The franchisor is an asset to your business. Successful franchise owners trust the franchise model and implement current and future business strategies. Your success is a collaborative effort between you and the franchisor. Take charge of your own destiny.
America's Best Franchises, LLC
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