What Should I Do Before I Begin Searching for a Franchise?

Buying a Franchise involves substantial investment and the assumption of substantial risk. Before entering into any kind of an agreement with a Franchisor, a potential Franchisee should exercise due diligence in researching all aspects of the Franchise and the Agreement. Before you even begin looking at franchises, you need to do an introspective self-evaluation of your own strengths and challenges. Sit down, get out paper and pen, and as objectively as possible answer these questions:

SKILLS / STRENGTHS

• What part of your current and past jobs have you liked doing the most?
• List your skills and evaluate how well you perform each.
• Describe the work environment that most appeals to you.
• Are you an animal lover? Auto buff? Artistic? What skills/hobbies do you have that may be applicable to a franchise business?
• Are you status conscious? Does it matter to you what the product or service of the franchise is or does the business potential matter more?

CHALLENGES

• What part of your current and past jobs have you liked doing the least?
• List your weakness, those things you’d not want to do or would want to hire someone to do in a business.

MANAGEMENT SKILLS

• Do you have experience managing employees? Did you enjoy it?
• Are you comfortable with recruiting employees?
• Do you have the experience and skill needed to create a work environment that will allow you to retain employees?

FINANCIAL CONSIDERATIONS

• How much capital do you have to invest?
• Can you afford to do without a regular income during the start up phase of your new business?
• What are your financial goals?
• How do you see your lifestyle changing as a result of meeting your financial goals?
• How do you feel about taking the risk of becoming self-employed?
• Do you have, or have you arrange to meet with, a reputable accountant and/or financial adviser?

ARE YOU A TEAM PLAYER?

• Franchising is all about following someone else’s system. Can you picture yourself in this role, executing a system you didn’t create?

Once you have answered these questions, you’ll begin to see a clearer picture of what talents you can bring to a franchise business and what you expect to receive in return. The next step is to start looking at opportunities and evaluating them based on your answers. It may take some effort to find the right franchise so don’t compromise.

Franchise opportunities come in many shapes and sizes and you never need to settle for one that is just not a great fit. There are businesses you can run yourself from your home and others that call for multiple unit locations in upscale malls with numerous employees.

If you decide that you would be well suited to enter into a Franchise, you need to do your homework before you settle on one. Choosing the franchise opportunity that best matches your needs, interests and style is your greatest assurance of happiness and success.

Reveiw the following as you consider different Franchises:

INVOLVEMENT

• Are you looking for an investment that will essentially run on its own?
• Are looking for a business that you will run yourself, or one in which you can hire someone to run it for you?
• Are you looking for an opportunity with a lot of freedom and independence, or one with significant guidance and structure?

INVESTIGATING AND SELECTING THE FRANCHISE

• Understand the market - be sure you understand the product/service and the demand for it.
• Are you looking for a franchise in an industry with which you are already familiar and/or experienced?
• Are you familiar with the competition? Are they in your region? How are they doing?
• Comparison shop - attend trade shows, talk to other franchisees. What has been their experience? What advice do they have to give you?

FINAL STEPS

• Talk to existing franchisees in the Franchise you've selected. Were their expectations met? Were they confident after completing training? Did they find the estimates for expenses to be accurate?
• Obtain the most recent copy/version of the UFOC and review it with an attorney and/or financial adviser familiar with franchises.
• Does the term of the franchise agreement mesh with your long and short term goals?
• Ask questions!