Searching for franchises and business opportunities is easy. However, there are more franchises out there than you would ever imagine. Finding the right one for you will take some time, research, and contemplation.
Start by considering a few key things about yourself, and then limit your explorations to companies that meet your goals and interests, fit into your budget, and that you have the ability to operate successfully.
HOW TO DETERMINE IF A FRANCHISE IS RIGHT FOR YOU
Follow a Franchise Analysis Checklist
-- About The Franchise
- Has your attorney approved the franchise contract?
- What legal grey areas have been identified?
- Will you have exclusive territory?
- Does the franchiser work with any other franchise handling similar products and services?
- What are the Franchise Contract termination penalties?
- If you sell your franchise, will you be compensated for goodwill?
-- The Franchiser
- What is the franchiser's number one focus?
- How have franchisees in the past run into trouble? Difficulties?
- What skills franchisees need most?
- How are conflicts resolved?
- Request the bios of Top Management. Do they have entrepreneurial backgrounds?
- Do the franchiser's earnings claims differ from their Franchiser Disclosure (FDD)?
- Has the Franchiser executed detailed due diligence on your qualifications?
- How many years has the Franchiser been operating?
- Does the franchiser have a reputation among the franchisees, competitors and business world for honesty, integrity, accountability and fair dealing?
- Has the franchiser shown you certified and audited financials on franchisees in your region and area which you can validate?
- Does the franchiser provide Executive Management and Personnel Training Programs?
- Does the franchiser provide any Capital or Credit?
- What merchandising Programs and Training does the franchise offer?
- Will the franchiser assist with site location?
- Does the franchiser have adequate financing to implement its Franchisee Plan?
- Does the Franchiser have a highly trained and experienced management team?
- What can the Franchiser bring to the table which you can't adeptly do yourself?
- Has the franchiser complied with State Laws in the past? What State Laws are in place regarding Franchise Sales?
-- The Franchisee
- How much Equity Capital will you need to:
- Purchase the Franchise?
- Operate until Break-Even?
-Where will you get the Equity Capital?
- Are you prepared to give up some independence for the advantages offered by the Franchiser?
- Do you believe you have the qualifications to succeed as a franchisee? What other Personnel resources can you provide?
- Are you prepared to spend a majority of your business life with this franchiser?
-- The Market
- Does an adequate market exist in your area?
- Will the market support the price level of the franchiser's products and services?
- What are the population demographic trends for your territory over the next 5 years?
- What will be the demand for your product and service in 5 years?
- What is the non-franchise and related franchise competition in your territory and region?
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