As with any other major decisions in life, going into business – whether traditional or franchising – requires due diligence in assessing several variables before coming up with a resolution. In buying the right franchise, careful considerations on the following is very important:
1. Ask yourself why you want to own a franchise.
2. Begin the search. Look for opportunities that are in harmony with you and that greatly interests you.
• Have a complete understanding of the business.
• Check on the business experience and track record of the franchisor.
• Determine the type of experience required in the business; the hours and personal commitment necessary to run the franchise; how much money is to be invested; and, the terms and conditions of the franchise agreement.
• Get information on the franchise by visiting stores; and interviewing the franchisors and existing franchisees.
Look into the product or service and discern what makes it stand out among other businesses.
Location, location, location…
Ask about the territory rights. Make sure that you get a good site selection.
Check on the depth and quality of the franchise’s labor pool, making sure that it provides strong and qualified workforce.
Training and Support
Determine the kind of training and support the franchisor will provide. Ensure that all levels of support are included, clarifying that support will continue after the grand opening.
While the upfront cost of the investment can seem expensive, in the long run it is probably not. A more significant expense can be the ongoing royalty and marketing fees.
Determine if there are resale options should the opportunity does not work.
Finalize a franchise agreement. This formal deal should detail the rights and obligations of both the franchisor and the franchisee, including the length of term, the start and end periods of the agreement, the renewal provisions and the end of the contract.