Starting your own franchise can be a great way to be your own boss and put your talents to work. It is not something you want to rush into, however, and you also want to make sure you thoroughly understand the business. Here are 10 things you really need to know before you start that franchise.
1. Determine if the business is right for you
Even though you may be given a good plan and proven training materials, it does not mean that it is a good fit for you. You need to decide if you can do that kind of work for several years and still enjoy it. Choose something you enjoy and make sure your talents and personality fit the franchise.
2. It takes a lot of work to get it off the ground
Even though there are many tips for success given in the manuals, and even though you are using a well-known brand, it will still take a lot of work to get known in your neighborhood. This means it will require many long hours at work before you start seeing any real profit.
3. Learn what other franchise owners think
You definitely want to talk to other franchise owners to find out what they think of the system. They have been in it for a while and can tell you the straight scoop. Also, the Small Business Administration warns that you should carefully investigate the franchise, or you may lose a lot of money.
4. How much training does the company provide?
Find out if the company offers good startup training, and it there is ongoing training. Also, find out if they train your employees before opening?
5. Do you have an exclusive territory?
Some franchises will promise you an exclusive territory. Others will not. If they do not, a competitor could open up nearby.
6. What percentage of monthly profit goes to the company?
Many franchises require that a certain percentage of profit goes toward the company. This is not unusual, but unless business is great, it may mean you will see little profit for yourself.
7. Do you need to buy all supplies from the company?
Buying all your supplies from the company could be very costly, especially if it is required. Some companies will allow you to get your own suppliers, which could mean a large savings.
8. How much money do you have toward the franchise?
Depending on the type of franchise you want to get, realize that it could be quite costly, says USNews. Not only will there be the initial cost in cash, but you may also need to have a certain amount as a cash reserve.
9. How easy is it to get help from the Main Office?
This is a very important matter. You want to be able to get help quickly, especially at the start. Find out if help is available and do they respond in a reasonable time.
10. Can you start more than one franchise?
Some franchises only let their franchisees open one franchise. Others expect you to open more than one. Be sure you know the rules so you can plan accordingly.