Franchise ownership has grown steadily over the last five years and it’s no wonder, considering that the total franchise monetary output in the US has increased over $200 billion over the last decade. Franchises are popular because you are buying into a tried-and-true system, which allows you the freedom to be your own boss without having to completely reinvent the wheel.
With all of that money out there for the taking, you may be asking yourself, “What does it take to become a franchise owner?”
There are many factors to be weighed as you take your first steps toward franchise ownership. First on the list is which industry are you interested in? There are likely franchise opportunities in every business sector ranging from hotels and health care, to fast food and financial services.
Of course, it is best to choose an industry in which you have some familiarity and experience.
Do Your Research
Once you have narrowed down the field of choices to your desired field, you can bring into focus the specifics. You will want to do thorough research into at least the following three areas:
The Industry—Looking critically at your chosen industry is important, as it will inform you about the greater market. Is it a crowded field, with many well-established players? Is it a growing sector that is catching on rapidly throughout the country? Or, conversely, is it a shrinking segment of the marketplace, and, if so, why? Think about where you would fit in the arena and what, specifically, you will be able to bring to set yourself apart.
The Company—With an industry chosen, you can hone in on the companies with which you are interested in doing business. The list of questions to ask yourself, and the company directly, are numerous, but take your time during this phase. Look up each company on the Better Business Bureau and the American Association of Franchisees and Dealers. Find out what the upfront costs are, whether the company offers a start-up kit, and what kind of training is offered. Think about specifics as well as broader questions such as whether the company’s culture and mission align with yours.
The Location—Does your area have a demand for the type of business you are looking to start? Franchises often do their own research before offering opportunities in a given area, but it is still crucial that you do some homework on this as well.
Submit An Inquiry
Now it is time to contact the company you have chosen. For most companies, this will be as simple as sending an email or making a phone call to communicate your interest. In some cases you will be asked a few financial questions up front, such as how much capital you have available to invest, but often times you will receive an application straight away.
Get Out Your Magnifying Glass
It almost goes without saying, but make sure that before you commit to anything, you have read through all agreements and paperwork thoroughly. It is imperative that you understand completely what you are signing. Review the requirements, financial obligations, training schedules, and how to prepare for your grand opening.