Investing in a franchise opportunity can open you up to a whole new level of income and freedom, but only if it’s the right opportunity. Like any business opportunity, franchises can be risky if you don’t go into it with the right motivation. There are five steps to analyzing a franchise to ensure you’ll make the best choice.
#1 – Decide if franchising is truly right for you.
Owning a franchise is different from working for someone else and it’s different from owning a business in another capacity. It’s a unique business situation and it comes with it’s own set of challenges and drawbacks. You need to understand franchising and what it entails before you consider it for yourself. Read about franchising, study the concepts and decide if you have the business skill, dedication and commitment in order to become a franchise owner.
#2 – Begin evaluating franchises.
Once you’ve determined that owning a franchise business is the right move for you, you need to start evaluating franchises. There are hundreds of franchise opportunities out there to choose from in dozens of different industries. Working in your business day in and day out means that you need to enjoy the nature of the business and want to work in it long term. Selecting something that piques your interest or relates to your previous job experience.
#3 – Keep your goals in mind.
Different franchise owners have different goals. Some are what you’d call “lifestyle mavens” who want to create a business that will support their lifestyle goals. They want to work shorter hours, have a more flexible work schedule and create their own level of wealth. Others are more focused on being “growth gurus” – they want to grow their franchise into a six-figure or more empire. These goals are very different and would be best suited for different types of franchises. Even within the same industry you can find franchises to fit lifestyle mavens or growth gurus. Make sure you know which one you are before you look at franchise opportunities in detail. This way you’ll be aware of the type of business atmosphere you want to create.
#4 – Evaluate the strength of the opportunity.
Franchise requires an investment of money and of time, so it’s important to do your due diligence before you invest. Understand the marketing plan that goes along with your franchise opportunity, and do some research about other franchise owners in different geographical areas. Find out all that you can about the opportunity so you can figure out how strong it will be for you. Of course, when it comes to business nothing is guaranteed but if you know the opportunity is strong you can be sure that you’ll have everything you’ll need to succeed.
#5 – Understand the legal side of franchising.
As a franchise owner, you’ll be responsible for a variety of agreements that you make with your franchising company. Signing a franchise agreement is a legal responsibility, so it’s important to understand the implications of that as you step into your role as a franchise owner.