Why Buy a Franchise?Owning a franchise provides numerous potential benefits. Forbes wrote a whole article on this, but we list several here, including:
- Less risk as you enter the startup phase
- Clear investment expectation in terms of cash requirement and the potential return on investment
- The benefit of built-in brand awareness
- Training and operational processes, procedures, and policies are pre-defined.
1. Perform Due DiligenceIt sounds obvious, but you would be surprised how many people take what is presented to them at face value. When buying a franchise, you don’t want to be “sold.” You want to enter into a business deal with a full scope of understanding and disclosure as a partner. You can enlist the help of others who have been through the process or who specialize in the buying and selling of franchises, and we’ll dive into that more later. You should do your part to review the documentation provided to you and pursue and identify information accessible on the internet, which is in abundance in this day and age. Between online research, the assistance of a supportive person or team, and requests for information you make directly to the Franchisor, you should be able to identify any potential red flags and accurately assess the financial health of the business opportunity you are researching.
2. Know ThyselfPlato may not have been talking about owning a franchise when he coined the phrase “Know thyself,” but it applies here nonetheless. Not everyone is capable of entrepreneurship, and not every entrepreneur makes a good Franchise Owner. Try to think through some of these personal reflection questions to determine whether this is right for you.
- Have you delivered results as an entrepreneur?
- Have multiple people told you they see you as entrepreneurial?
- Do you have the cash required to launch a franchise, not to mention the appropriate level of risk tolerance?
- What sort of business works with your lifestyle?
- What model suits your skills and interests while also aligning with market opportunity?