Because franchises are an important business model, I often get asked for advice on buying a franchise business. So, here are some tips on how to go about buying a franchise.
Some Franchising Pros
Buying a franchise helps you get in business faster. You don’t have to spend resources creating a business model or concept. You have support and expertise from a franchisor and from peers. You might have a useful set of procedures and standards in place. Brand awareness might exist already.
And Some Cons
Not all franchises are created equal. Some have great support. Other do not. Some have developed a solid product, brand, service or model but have no idea how to market. Others have weak business models but are aggressive marketers.
Some “How To” Tips for Buying a Franchise
Buy a business that fits your skills and motivations. If you don’t like selling and you don’t want to hire salespeople, then don’t buy a franchise that requires a lot of selling. If you get bored being in one place every day, don’t buy a retail franchise where you’re stuck in the store every day.
Have more money than they suggest. Revenue almost never ramps up as fast as projections. Have a “safety net” available.
Understand what you’re buying. Are you getting a recognized brand? Are you buying expert help? Know what the franchisor is going to do for you in exchange for the fees you’ll pay.
Create your advisory council before you buy. Many successful entrepreneurs have advisory councils – experienced and trusted people to help them make good decisions. Have these people in place before, not after, you buy your franchise.
Talk to successful and unsuccessful franchise owners. Not everyone succeeds in everything. Your franchisor should be open to you talking with people who have not done so well. They can give you priceless insight into the franchise company.
Types of Opportunities
You name it and there’s a franchise for it. From modeling schools to senior home care, from paper shredding to hair removal, there are franchises for just about any personal service or product. From pet poop pickup services to pet detectives to doggie daycare. From mold removal to dating services to baby boot camp. There are thousands of services, business and products that can be sold using the franchise business model.
Buying a franchise can be a great way to start a business. Or it can be your worst nightmare. Do your homework and evaluate your franchise opportunities thoroughly to make sure what you invest in is right for you.