Everything You Need to Know Before Buying a Franchise

By Bruce Hakutizwi

Photo by Mike Petrucci on Unsplash

If you’ve ever considered owning a business of your own, the option of buying a franchise has to be a serious consideration. Of course, deciding between buying a franchise or an independent location involves a number of important factors:

  • You need to determine if franchising is right for you, personally, and your professional goals.
  • You should consider the pros and cons of franchising versus running an independent business.
  • You’ll also want to evaluate each potential franchise purchase based on its unique strengths while paying attention to any warning signs that could mean you should steer clear.

Going through the following tips, you’ll be in an excellent position to decide if buying a franchise is the best way for you to fulfill your entrepreneurial dreams. Let’s begin by determining if franchising is right for you.

Is buying a franchise right for you?

To help make this self-examination, consider the following five personal and professional traits shared by all successful franchise owners. If the following descriptions apply to you, there’s a good chance you could succeed as a franchise owner too.

  1. You don’t need to control everything. Since franchise owners must defer to the parent company for decisions regarding nearly every aspect of the business, entrepreneurs who want and need full control will feel stifled. On the other hand, if your fulfillment comes from running a well-oiled machine according to strict, proven rules, franchising is a perfect fit.
  2. Risk-averse. Some business owners are willing to risk everything to accomplish their goals. In fact, they wouldn’t have it any other way. Of course, some risk is a necessary part of any entrepreneurial effort, but if your preference would be avoiding or mitigating as much of that risk as possible before pushing ahead, then the tried and true systems making up a quality franchise will appeal more.
  3. Hardworking. It’s vital to realize that, when terms like “simple, “turnkey,” or “duplicatable systems” are used to describe franchises, it’s not meant to imply owning a franchise is a stress-free vacation compared to owning an independent business. Successful franchise owners — like their independent counterparts — have to be extremely hard working people, or they’re simply not going to succeed.
  4. Financially prepared. As noted above, upfront costs and ongoing operating expenses are generally higher with a franchise location than when opening an independent location. These higher costs aren’t generally avoidable because they’re part of fulfilling the franchise agreement, and can’t be mitigated through smart decision making. So, having adequate financial resources available from the start is an important requirement.
  5. Interested in ongoing growth. Most franchisors have built their business models based on plans for aggressive growth. With duplicatable systems and established “territories” in which a location has the best chance at success, you should be able to grow revenue quickly through expansion. If your real goal is to run a mom-and-pop shop or similar one-location business, this growth potential is wasted.

So, do you have what it takes to make it as a successful franchise owner? If you possess the five Go to the full article.

Source:: Business 2 Community

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