So you have seen a franchise opportunity that you like and cannot wait to sign the franchise agreement and become a business owner. But before you take that big step, hesitate. After all, buying a franchise is a major decision in life, and you want to make sure it’s right for you.
Here are some questions you need to ask yourself before sealing the deal with your potential franchisor:
What Are My Goals?
Knowing the goals you’re trying to achieve with your franchise business can help ensure that you go in the right direction. For instance, if you want a lifestyle franchise that you can manage while still handling your family responsibilities, a home-based franchise would suit you better than a restaurant franchise, which would need more energy from you to operate. If you want to make a lot of money while minimizing your expenses, it would be better to choose a franchise you can own and operate instead of recruiting someone to help manage it for you.
How Much Will It Cost?
Aside from the upfront franchise fee, you will need to pay a lot of expenses to start your franchise and keep it operating over time. Make sure to read the franchise disclosure document (FDD) to know what it typically costs to open a franchise and plan your budget for the first 12 months, ensuring that you include your salary as an expense. There is no guarantee that you will start making profits immediately, so you want to ensure that you have got enough funds to manage your franchise successfully.
Also, you need to consider royalty fees and merchant card processing costs.
How Much Do I Currently Have?
Once you know what it will cost you to open and manage your franchise, determine whether you have enough money to begin the business. If you don’t, find out which financing option suits you best! You may apply for a small loan, dip into your savings, or consider franchisor financing.
What Kind of Support Does the Franchisor Provide?
When you purchase a franchise, you’re entering into a partnership with the franchisor. You want to make sure that the franchisor has proven to be a reliable partner and will be available to help if you have any issues or concerns. After all, the franchisor also benefits from the success of franchisees under them. However, some franchisors get more involved with franchise owners than others. So, it’s important to speak with your franchise representative to know the kind of relationship you can expect once you join the franchise family.
Can you imagine yourself doing this for the foreseeable future?
When you start a franchise business, you are not only doing it for “the present moment” but also for the years to come. You have to be sure that you can commit to being a business owner for the long term and have the energy to keep working to ensure your franchise’s success. It’s not an easy thing to do. Are you ready for it?
It is important to ask yourself all these questions to make sure franchising is a good fit for you.
