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Why are you considering franchising? Because it offers lots of support, proven brands, and established operations and protocols, right? But now you have to figure out which franchise is the right franchise, and the answer will be different for everyone (or we’d all own an international food chain that costs a lot of money).
The journey to becoming a franchisee is engaging and fun. But like buying a house or choosing a college to attend, it has some challenges, too. What you don’t want is to spin your wheels doing something that is not suitable for you and your goals. As you consider a franchise purchase, there are a few areas where you can smooth the road for yourself and reduce frustrations.
#1 Limit Your Industry Choices
You are entering this search for a reason. Maybe it’s a financial investment or a dream of being your own boss. The reasons are important ideals, so remember that you will be stuck in the industry you choose, so choose one that makes sense based on your preferences. Maybe you already know the industry specifically.
However, if you are looking for opportunities regardless of the industry, you can easily become frustrated with the plethora of choices, statistics, and performance numbers. Of course, financial details matter, too, but limit your industry choices by soul-searching a bit. Your passions and how you spend your days may be more important than profit margins. If you know this at the beginning of your search, you will not be easily distracted by a shiny object or industry that will not meet your personal needs.
#2 Flex When it Comes to Location
Waiting for the perfect location might mean delaying your goals for months. We don’t suggest agreeing to every site, though. If the franchisor’s sites are too far to commute or you aren’t comfortable in the neighborhood, the site is not a good choice for you.
Just keep in mind that franchisors need successful franchisees and choose locations based on their experience. If your dream location is not available, your second choice is still acceptable. Or maybe even your third. Listen to the experts, be a bit flexible, but don’t sacrifice your personal needs.
#3 Know What You Have to Invest
Every franchisor will evaluate your net worth as part of your approval process.
In addition to that, you must be comfortable with what you can invest. After you know those numbers, expect to spend even more to get through the first tight months of operations. Costs go up, and unexpected things happen.
Once approved, you need enough liquid capital to cover the business's operating costs (and your own life) for at least two years. You might be profitable quickly, but you might not, so plan for success by being ready to see the franchise through the early and unsure days. As you delve into your chosen industry, you will understand whether or not you can afford each brand you research. Know your financial limits, and then keep your search realistic.
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As you search for your franchise opportunity, enjoy the process, but reduce these three areas of frustration by knowing your limitations ahead of time. Then, you can make your desires clear to franchisors and plan for your franchising future.
Anne Daniells is a co-owner of Enterprising Solutions, a professional services firm specializing in corporate communication and financial improvement for businesses where she shares decades of corporate and entrepreneurial experience—including franchise ownership—in her writings on business culture. She has authored hundreds of articles for publications including AllBusiness.com, TweakYourBiz.com, and MSN.com. Reach out via her website for more on where corporate culture, communication, and human architecture collide.