Aspiring business owners commonly begin their business experience by buying a franchise. In Part 1 of this series, we discussed five important points one should understand before deciding upon franchise investment. If purchasing a franchise is still an attractive idea after contemplating those issues, a franchisee-hopeful may move on to the next five considerations.
One of the biggest differences between owning one's own business and owning a franchise is that a franchisee will be expected to follow strict rules set in place by the corporate office. If an entrepreneur is going into business for himself because he does not enjoy relinquishing control, owning a franchise is not a smart decision. Franchisees are given instructions on everything from the paperwork they must fill out to the type of uniforms their employees must wear.
No matter how much research is conducted, investing in any type of business is always a risk. Prospective business owners must conduct a great deal of self-reflection (personally and financially) to assess how much they can afford to risk on a new business venture. As we mentioned in Part 1 of this series, franchises can take time to turn a profit, so investing in a franchise is not a get-rich-quick opportunity.
It's not unusual for a budding entrepreneur to become excited about a franchise opportunity before understanding what's needed financially. Most franchises require that their franchisees have a minimum net worth, so an aspiring franchisee should assess assets and liabilities to generate a thorough financial statement. Shopping for a franchise is inadvisable until a firm budget is in place.
Prospective franchisees can increase their potential for success by making lists of their own traits, professional skills, and financial potential before searching for franchise opportunities. These future business owners will save precious time and resources by specifically inquiring about franchises that are well suited to them, instead of casting an unnecessarily wide net.
After determining which franchises are best suited for their skills and needs, prospective franchisees should research each franchise on the short list. Franchise development representatives will be able to answer many questions, and franchisors will also offer Franchise Disclosure Documents with further information. Unsurprisingly, most interested entrepreneurs will request sales and earnings figures, but that information is sometimes difficult to discover through official channels. Current franchisees are the best source of information that the franchisors aren't willing to divulge, and current franchisees will also give the most honest advise about investing in the company.
Owning a franchise business can be rewarding and financially profitable when the correct preparation and research are conducted. At George & Company, our Franchise Group is highly trained to guide you through all of the steps to becoming a franchise business owner. Whether you have general questions about become a franchise owner, or you are curious about which franchise opportunities are available in your area, contact us and let us guide you on the path to business ownership.