Purchasing a franchise can be a big decision in your professional and personal life. You need to do your research beforehand to ensure it is financially beneficial. Like any small business, staying afloat for several years can be difficult. Here are a few recommendations to help achieve your franchise goals.
Know Your Capabilities
Are you a creative type of person? Do you like sales and talking with people on a regular basis? It's imperative to be brutally honest about yourself to make sure the franchise is right for you. Whether it is selling coffee or electronics, work towards your strengths. You aren't expected to be a professional at everything though, and you may need to utilize true professionals like an insurance agent, franchise attorney, and accountant.
Research Several Franchises
Don't be afraid to talk to several different franchises, at least over five. Ask them about hidden costs, get recommendations for professionals that can help, and ask if they get any corporate support. Online they may have reviews and personal information regarding the franchise as well. Sometimes business owners don't want to reveal weaknesses or struggles they may have with their franchise, so be patient and kind in searching for any information.
Read the Complete Franchise Disclosure Document (FDD)
While this document can be intimidating in its length, make sure you take your time to read it fully. If there is something you don't understand, don't glance over it. Ask a professional, like a franchise attorney to explain it to you. You may be trying to save money, but in the long run, the cost will be worth it.
Crunch the Numbers More than Once
The cost of a franchise is always more than the initial number to purchase the franchise. You must include hiring the professionals you may need, such as an accountant. And it can take several months or even a year to get the franchise to be profitable. The FDD can also help you find unexpected costs like litigation involving the franchise or special deals you are required to offer.
Get Your Hands Dirty
One of the best ways to learn about a franchise is to work in the store. Some companies make this a requirement. You will benefit from learning the ins and outs of the business. Then on opening day, you will be less worried or stressed.
Buying a franchise is a serious financial investment. Do your research, talk to many franchise owners, and get any professional help you need. The more work you do beforehand, the more likely it will lead to your success.
