As we’ve discussed in previous blogs, choosing to buy a franchise rather than starting from scratch by starting your own business can be a lucrative and more consistently successful prospect.
You will be taking control of a proven concept and a brand name that already has strong recognition. Choosing the franchise that is right for your needs and suits the circumstances of factors including location and need is vital. There are thousands upon thousands of franchises available, so we’ve detailed a few steps you need to take before choosing to purchase a franchise.
1) Know your goals
Take some time to do some serious introspection so you can figure out why exactly it is you want to buy a franchise. What are your goals? What do you want to achieve? Once you’ve firmly established the “why,” you’ll have a much clearer path towards figuring out which franchise would best suit those goals.
2) Talk to other franchise owners
Seek out other owners of the franchise you want to buy and talk to them about their experiences. Unlike Franchise Consultants, who sell franchise ownership packages or people from the franchise corporate office, current or past owners have little reason to lie or mislead you about what it’s like to own and operate that specific business. Find out what kind of success they have had, and if there have been issues, try to figure out if it is a result of the product, the market, or the individual owner. Also make sure to find out what his or her experiences with dealing with corporate has been, such as how much support they are given.
3) Learn about established training/support systems
One of the biggest benefits to owning a franchise is the support you can receive from the corporate office. The franchise will usually have pre-established training methods and various other forms of support to help you market, grow, and improve your business. Find out exactly what the corporate office does to support its franchisees and make sure it is at a level you will be happy with.
4) Find out about past or current litigation
Does the franchise have past litigation that could be a harbinger of issues to come? Does it have pending litigation against it that could result in profound repercussions that negatively impact your business? Do your research and find out all you can about the litigation the franchise has faced or is facing so that you don’t buy a house of cards that could fall at any moment.
5) Read the disclosure document VERY closely
Every franchise company is required to send you a disclosure statement that details everything you could ever want to know about owning and operating a franchise with them, and then some. They are extremely long and it can be easy to overlook important details. However, this is your future and livelihood at stake, so take the time to read and understand every page and every line.
6) Investigate competition
Know the area in which you want to operate your franchise. Is it saturated with competition or is there a niche in the market? If there is competition, are you confident that you will be able to outperform potential competitors or still fulfill your business goals with competitors taking business from you? Know the market and know the competition inside and out before you decide to purchase a franchise.
For more information or help with purchasing a franchise, please contact the Trembly Law Firm and let us help you achieve your business dreams.