There are many aspiring business owners who consider buying a franchise to improve their lifestyles and run a business with an established brand, systems and support. However, for many folks, finding the right franchise opportunity is the real challenge.
Here are a few tips to help you find the perfect franchise that matches your lifestyle.
Before you buy a franchise, ask yourself:
- Do I like working with others or on my own?
- Would I like to be in a supervisory role?
- Do I enjoy doing certain administrative tasks?
- What type of time commitment do I want to dedicate to a franchise?
- What level of income would I need to enjoy business ownership and sustain my desired lifestyle?
Other critical questions focus on the initial investment to open a franchise and your personal financial needs.
According to a report on food franchising by Franchise Business Review, 51.5 percent of food franchises earn profits of less than $50,000 a year; roughly 7 percent top $250,000, with the average profit for all restaurants coming in at $82,033.
Do your research. It is important “to distinguish between ‘business profit’ and ‘owner income.’ Prospective franchisees often confuse a business’s profits with their potential annual income/salary, which is a big mistake,” according to Franchise Business Review.
Define your personal goals
Why do you want to buy a franchise in the first place? Is it the desire to own a business, improve work-life balance, or use your skills and talents to increase your net worth?
Many people set goals only to fall short of achieving them, which can reinforce negative feelings toward your own abilities. Instead, define realistic, attainable and measurable goals from the start.
This will allow you to decide what type of franchise and business model fits you best. You will want to get it right the first time.
Narrow down your franchise options
With the countless franchising opportunities available, picking the right one can be an overwhelming experience. However, once you know yourself, goals, skills and talents, you are better equipped to remove options from your list.
Focus on business models and industries that pique your interest and align with your passions. The options are endless: from home-based travel agency, business services, cleaning & maintenance and retail to education, real estate, fitness and technology. Research franchising opportunities that match your interests.
Next, create a shortlist of possible franchise options based upon product-market fit, location, industry, profitability, cash required, initial investment, support/training, brand recognition, and community to name a few. Also, make sure to identify any and all hidden costs such as royalty fees or required marketing spend.
As a potential franchise owner, pay attention to the added value as well. Does the franchise offer ongoing training, a supportive community of fellow franchisees, access to business advisors, etc.? What type of support team is available for dedicated assistance?
Be open to new franchise opportunities
As you search for the ideal franchise, take a thoughtful approach. For instance, many times, aspiring owners don’t buy a particular franchise because they can’t see themselves operating within a specific niche.
Even if you have no experience in a particular niche, it’s important to look at new franchising opportunities with a business mindset. One of the questions you should ask is, “Is this franchise profitable?” A willingness to remain open could open up new and exciting doors.
Create a franchise budget
Needless to say, you should be aware of franchise ownership costs. One of the most important tasks before you open a franchise is to set your budget.
Talk to existing franchisees and read through franchise disclosure documents (FDD) to discover details on projected revenues and profit margins, fixed costs, as well as variable and semi-variable costs like royalty and advertising fees. Once you understand the ongoing (monthly or quarterly) fees, you can factor in additional operating expenses. It is important to know all of the possible costs of owning a franchise.
Becoming a franchise owner
Making the leap from an employee to franchise owner can offer many benefits, but you need to be comfortable with the aspects of running a new business in order to reap the true benefits of franchising.
Don Daszkowski is a serial entrepreneur and founder of the International Franchise Professionals Group, also known as IFPG. The IFPG is an internationally recognized group of franchise professionals that includes franchisors, franchise consultants, franchise brokers and other franchise professionals that help potential candidates in the process of buying a franchise. The IFPG offers a training program for entrepreneurs to become Certified Franchise Consultants and earn a significant income selling franchises.