Buying a franchise is a great way to start your own business. 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 select the best franchise — one that will be profitable in both the short and long terms?
Your first step should be to determine what industry your franchise will be in. Even though you will have a “blueprint” from the franchisor on how to run the business, experience counts. Your knowledge of a particular industry will give you valuable insight into how to run your franchise and maximize profit.
So if you are a successful restaurateur, consider a restaurant franchise. You are not confined to opening a restaurant by any means, but your hard-won experience in that market will give you a leg up on the competition.
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 the type of business, their enthusiasm for their new business can give them an edge.
If you are considering entering a new industry, try to choose something you are interested in. If you would rather have elective surgery than talk to strangers, a retail franchise that involves lots of customer interaction is probably not for you. Conversely, if you thrive on meeting people, you won’t be happy in a franchise that keeps you behind-the-scenes. Your franchise will be a huge part of your life for the foreseeable future. Make sure it is something you will enjoy.
If you are having trouble finding a franchise that is a good match for your skill set and interests, take a step back. Are you sure franchising is right for you? Although there are distinct advantages to being a franchisee, not everyone is cut out to be own a franchise, and there are some disadvantages as well. See The Disadvantages of Franchises for more information.
But if you are undeterred, begin researching the various franchisors 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. 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 franchisor you were so excited about teaming up with does not offer the best deal. But if your franchisor of choice does offer a competitive franchise package, your choice will be easy. 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 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, believe in the brand, and are passionate about the business, you are more likely to succeed.