How to select the right franchise?
Are you sick of your job or maybe your career is not going in the direction you’d like it to go? After all, you work hard for your boss and the goodwill you create remains in the company you work for and you can’t sell your job when you leave. Well, perhaps you should consider buying a franchise as a great way to start your own business and to build wealth. It allows you to skip much of the legwork of starting a business from the ground up, and it gives you the distinct advantage of a proven business model. But how can you ensure that you’ll select the best franchise – one that will be profitable in both the short and long term?
Your first step should be to determine what the ideal business is for you? Create a need and wants list and ask yourself some simple questions. If you found the ideal business what would it look like? What industry will it be in? What impact will it have on my family or social life? Can I afford it? How much money can it make me? Will it provide an improved financial position and lifestyle? And will I have an asset to sell at the end?
You may also ask, does my previous experience dictate what businesses or industries I should look at? So if you are a successful restaurateur, you could consider a food franchise. But, you are not confined to opening a restaurant by any means, In contrast, some entrepreneurs choose to buy franchises in industries they have no experience in, often because they have a passion for a particular market. While these business owners will not have the benefit of experience in this type of business, their enthusiasm for their new business can give them an edge.
Many franchisors don’t look for franchisees that have industry experience, this way you are easier to train and you don’t come with pre-programmed habits on how it should be done and you will more likely follow the system.
If you are considering entering a new industry, try to choose something you are interested in. If you would rather have elective surgery than vacuum your rugs, a carpet-cleaning franchise is probably not the best choice for you. Your franchise will be a huge part of your life for the foreseeable future. Make sure it is something you will enjoy.
Once you have found the franchise you are interested in, you may be asked by the franchise company to attend several interviews and complete an application so they can assess your suitability to the business. This process should be done at your own pace and never rushed, make sure all your questions have been answered to your satisfaction and you are clear of the obligations that the franchise agreement contains. You will be unable to enter into an agreement or sign up for a franchise until you have been given at least 14 days to assess the legal documents provided by the franchisor and then you will also be given a 7 day cooling off period after signing.
Many Franchisors choose to outsource the recruitment and screening to professional selection companies like Franchise Selection who have to ensure that each candidate meets the standards set by the Franchisor. They will also arrange several interviews including a telephone interview after the enquiry is made as well as many face to face meetings. Once an application is received all applicants are reference checked and checked for criminal history. Each candidate is guided through the disclosure documents and Franchise Agreements and they will ensure that all candidates seek independent legal and commercial advice in relation to the purchase of the business; they will also ensure that the candidate is financially sound and has the proper financial resources before they are presented to the Franchisor or their board for final approval. This really takes the selling out of granting franchises and you are selected or declined based on your skills, personality and overall fit to the business.
If you are having trouble finding a franchise that is a good match for you, perhaps you need to revisit why you were considering buying a franchise in the first place, usually after many weeks of searching for a business it is easy to be confused and nervous and you may even start to doubt yourself.
Most potential franchisees who are looking to buy a franchise are generally trying to change something in their life, for some it may be their career, for others maybe their financial future or lifestyle and no matter how hard you look or what ever you may be told by different businesses, all business opportunities will involve some level of risk, but don’t let caution or fear stop you from trying, who knows you may be very successful or you may fail. The one thing that is certain for your future is that if nothing changes, nothing changes!
Although there are distinct advantages to being a franchisee, not everyone is cut out to own a franchise, and there are some disadvantages as well. But if you are undeterred, begin researching the various franchises in the industry you have chosen. Even if you have your heart set on a particular brand name, you owe it to yourself to do the due diligence. Compare the offerings of the various industry leaders, talk to former and current franchisees, and crunch the numbers with your accountant and make sure you obtain legal advice. Visit all the nearby franchise locations in your area to get an even better sense of the franchise’s personality.
Once you have done your research, you may find that the franchise you were so excited about is not perfect, it won’t be. Like everything in life it will have its plus’s and minus’s, but if you are willing to follow the system and work with the franchisor it will deliver a reasonable result for a reasonable effort and you will have the enjoyment of working for yourself but not by yourself. Plus, your excitement about the company will make you a great candidate for a franchisee and an excellent brand advocate.
In the end, there is no formula for finding the right franchise. It is as much about your instincts and gut feel as it is about dollars and cents. Of course, you want to shop around for the very best deal and find a franchise that will deliver an excellent return on your investment. But much of finding the right franchise has to do with how you feel about the business and the brand. If you enjoy what you are doing, follow the system, believe in the brand, and are passionate about the business, you will most likely be successful and hopefully have a valuable asset to sell in the future when you are ready for the next challenge or retirement.