Most people running a franchise business today have already worked before entering the franchise world. While some made a midlife career change into franchising, some were about to retire and didn’t want to sit down idle throughout the day. But as they weighed their options, almost all of them considered franchising a better way to work, earn money, and live their lives.
Choosing a franchise to buy can be challenging due to the multitude of options out there. So which one is better for you: a child-focused franchise or a beauty and health franchise? To help you make the right choice, we have provided below four simple tips to follow when deciding the best franchise for you.
1. Take a look in the mirror
Even if you choose the most successful franchising models, you may still find it difficult to succeed as a franchisee. This is because we all have personal motivations and preferences that determine which franchise will suit us best. Ask yourself why you intend to start the business. Is it because you want to set out on your own, have a side hustle, or build a business empire? Or is it because you want to be leaving the house in the morning? Your answer to these questions is very important. If you have been home-schooling your children for many years and want to take a break, a tutoring franchise won’t be a good choice for you. However, if you are retiring an executive and would like to share your expertise, tutoring people would be a great option. Think about your motivations so that you can be comfortable with your choice of franchise.
Also, you need to think about how long you want the franchise to last, how many hours you want to work per day, and the franchise industry you wish to be involved in. If you want to work part-time, a five-year deal in a seasonal franchise may suit your needs. Sure, that would limit the franchise choices available to you, but if that design is what you are interested in, you can look for an option that you are okay with.
2. Check your wallet
When starting a venture, it is good to think big and set personal goals, as this ensures business integrity. However, we are always limited by our wallets. The franchise options available to you will depend on your financial situation. To become a franchise owner, you’ll need to have enough money to start and run a business for months, even if you don’t make any profit. Franchise companies want to see that you are successful before taking you in. When you know your financial capabilities, you and a suitable franchisor will be excited to move ahead and begin a wonderful partnership.
Once you know where you stand financially, refer to Tip 1 to determine how much risk you would like to take. If you are financially okay, you may find it difficult to invest a chuck of your hard-earned money into a franchise business (or you may be willing to pump in more money than others).
3. Consider your personal skills (and interests)
Not all franchisees know the in-and-out of their chosen franchise industry when starting out, but most of them at least like what the franchise specializes in. There is a franchise out there that aligns with your skills or interests. You may choose a safe field that you are experienced in or venture into a new area knowing you are going to receive support and training from your franchisor. For some people, personal skills or interests won’t be a factor, provided the particular franchise seems like a great choice based on Tip 1 and Tip 2.
4. Research the Franchisor
You can see that the first three tips focus on your own values. Now, let’s talk about the other party. When you have determined your preferences and cut down your franchise options, you then need to consider the role the franchisor will play in your business’s success. Remember that the franchisor is a potential business partner, so the company you choose must meet your expectations regarding business culture, mission, and performance.
- Go through each section of the Franchise Disclosure Document and ask questions to understand the processes, fees, terms, renewal, territories, and time frames.
- Read the franchisor’s financial statements. The company’s plans and projections will determine your place within the organization.
- Research the franchise’s legal issues. A company may have disagreements with its competitors and customers, but it should not be a common thing.
- Speak with existing and past franchisees of the company. Is their life similar to what you saw of yourself when you looked in the mirror? Interview them to know their relationship with the franchise company and whether they are okay with the support they get.
Becoming a franchisee is a smart, exciting choice regardless of your “why.” And with the wide range of options to choose from, it will be easy to find a franchise that suits your personal and financial goals if you follow the tips above. As you go through the process, you will have a clearer understanding of which franchise is right for you.
