Have you ever tried Googling ‘Franchise Opportunities’? If you have, you’ll know that over 302,000,000 results are populated. So, if you’re someone who is interested in franchise ownership, how do you even know where to start?
Most people would turn to brands they use on a regular basis. However, this is typically not the best approach and is one of the biggest mistakes people make when searching for a franchise that is best suited for them.
Instead of just looking at the product or service the franchise offers, look at the model the franchise has established. Then, evaluate whether that model is suitable for your skills, experience, lifestyle, strengths, weaknesses, likes, dislikes, and financial situation.
A good place to start would be to consider the time that you are willing to dedicate to the business. If you are looking for a nine-to-five job, this will automatically eliminate some industries, such as food, for example. Are you looking for a business with flexible hours? If so, there are certain industries and franchises that allow you to build your schedule based on your own availability. When do you like to vacation? If you like to go away for a couple months in the summer, considering a business that peaks during the summer months is not a good idea.
You should also think about the people you want to work with – both customers and employees. If you enjoy working with other business owners and have a large network, considering a franchise that is based on a business-to-business (B2B) model may be a natural fit.
When it comes to employees, you should consider how many employees you want to have, as well as the type of employees you want to work with. There are many businesses that you can start as an owner-operator to keep your costs as low as possible, or you may want to build a team and grow the business with them. Are you comfortable working with high school students or do you prefer working with a highly trained workforce? You need to determine who you want to surround yourself with as you grow your business.
How do you feel about sales? Regardless of the industry, every single business – franchise or not – has a sales proponent to it. However, there are many different aspects of sales and it doesn’t necessarily mean you’ll be doing cold calling. Some franchises are based on networking, some depend heavily on trade shows, some require a large social media presence, and others are mainly referral-based businesses.
Another factor that plays a large role in determining the best franchise for you will be your financial situation. This includes both the numbers that the franchisor will look at and the numbers you should be considering.
To financially qualify for a franchise, you’ll have to meet the franchisor’s minimum liquid capital and net worth requirements. The liquid capital amount typically includes the franchise fee and some working capital for the first year of business. Having awareness of these numbers will also help you once it’s time to look at financing options, if you go down that route.
The numbers that you should most closely look at when deciding which franchise is right for you are the franchise fee and the overall investment. One of the common mistakes prospective buyers make is looking solely at the franchise fee and assuming that’s the investment amount they’ll need to start the franchise.
It’s really important to be aware of what is included in the franchise fee, but more importantly, you need to determine what the overall investment level is for the franchise. The overall investment includes everything from equipment, lease, car, marketing, training, technology, and all the other fees associated with opening the doors to your business.
At the end of the day, make sure you’re choosing a brand that suits your lifestyle and your personality. Make sure you choose the business that you believe in and that you would be proud to represent.
Once you choose the brand, trust in them and their system. You chose them for a reason. Follow their advice, speak to your fellow franchisees, believe in yourself, and make that entrepreneurship dream a reality.
Remember, just because you’re in business for yourself, doesn’t mean you’re in business by yourself – that’s the value of buying a franchise!
Natali Pupovac-Peters
Franchise Consultant
Business Alliance, Inc.
natali@topfranchisebroker.com