Franchising opportunities abound for any entrepreneur looking in today’s business markets. There are several important steps to take when determining how to choose a franchise business right for you. Some of the considerations include knowing what type of business you are looking for, what type of services you want to offer and determining how much money you are able to invest initially and in the future of your business.
One of the first issues to look at in how to choose the right franchise is the cost involved in purchasing a franchise business. Determining how much you are able to initially invest, and how much you are able to continue investing as your franchise business grows will narrowing down what franchise opportunities are available for you to choose from. Initial franchise fees to purchase a franchise business could run from tens of thousands of dollars to hundreds of thousands of dollars. Other start-up and ongoing costs to consider are rent for a pre-existing office, store, building or facility, or the construction costs to build a new one, costs to equip the business, initial inventory, operating licenses, insurance, and promotion fees.
Another consideration to help you choose which franchise business is right for you is the skills, training and education you already possess. In order to own or run certain businesses there may be training, licensing or certifications that you and your employees may need. Businesses that may have certain requirements for training, certifications or licensing include real estate agencies, auto repair, interior design, or tax preparation.
Your goals for your franchise business can also help determine what franchise would work best for you. It’s best to choose a type of industry or business you would like to work in. For example, lets say that you enjoy electronic cigarettes and vaping and go into those stores on a normal basis. An electronic cigarette franchise would be a great next step in your franchisee pursuits. You may also need to consider whether you want your franchise business to be a sales oriented, or a service business.
There are several ways to find franchise business opportunities. Visiting local franchise outlets that you may be interested in gives you a look at the business in operation. You can also find information by attending franchise Expositions, contacting a franchise broker, or obtaining franchise handbooks. The handbooks can be found either online or at the local library.
Once you’ve made your chose in a franchise, before you sign any paperwork or invest any money, the franchisor is required by regulations to provide you with the Franchise Disclosure Document for the business. The Franchise Disclosure Document helps the buyer weigh the risks and benefits of owning that particular franchise business. In the document is it required that there are 23 specific items disclosed. These items must include information about the franchise, the franchise’s offices and about other franchisees. The Franchise Disclosure Document is enforced by the rules of the Federal Trade Commission.
How to choose a franchise business that is right for you takes diligence and research. Knowing where to find franchise opportunities, how much money you can invest, and the type of business you want will help in your business pursuit.
1. Federal Trade Commission. “A Consumer’s Guide to Buying a Franchise.”
2. Federal Trade Commission.
9 April 2016