If you’ve always dreamed of running your own business, but aren’t ready to take the leap and start your own, you should consider purchasing a franchise. This will allow you to borrow another company’s business model and name for a fixed period of time and provide you with a time tested and successful business model to follow, which can be a safer bet than trying to start your own business.
However, there can be several disadvantages to owning a franchise, especially if you don’t know what to look for in one. Before you decide on a franchise, browse through these tips on what to look for in a franchise:
1. Check for a Proven System
Before buying a franchise, be sure to check out their systems thoroughly. There should be systems for everything from payroll to marketing. You don’t want to be flying blind, so if something seems off, you may want to keep looking.
2. Check for Success
You should also investigate and try to find franchise owners who have been successful with said franchise. Find out how many are successful and if they needed any special skills or connections to obtain success. If franchisees are not successful ask them why they feel they are not achieving the results they expected. Most often it is not the result of problems with the franchise model, but execution on the franchisees part within their own business of the model.
3. Examine Income Potential
Determining franchise income potential can be tricky as it’s dependent on multiple factors. Try compiling a list of successful and recently failed franchises, then try to determine how each franchise got to their end result.
4. Determine Potential Demand
A great tip on what to look for in a franchise is to determine whether there is demand for the franchise’s services. For example, if there is a great demand overseas for their services but little demand domestically, that could significantly impact your franchise income potential. Determine other market factors such as downturns in the economy, financial markets or real estate. Many franchise concepts are less susceptible or impacted by these events than others.
5. Know the Costs
Many franchises will have fees in addition to any royalty payments such as program licensing or training fees. Be sure to learn about all the potential costs before you commit to a franchise. It’s always a good idea to determine an appropriate level of working capital to ensure the proper funds are available to not only fund the business but carry it until proper self-sufficiency with profitability.
6. Ask How Franchisees Are Treated
It’s always a good idea to track how the company owners have treated their first franchise owners. Try to schedule a personal visit with franchise owners. If the company doesn’t allow you to visit with the franchise owners, that is a major red flag. Ask about ongoing training and support and how much interaction there is between franchisees and the franchisor.
7. Seek Advice From Fellow Franchisees
Meeting with fellow franchisees can be a great help as they can mentor you and answer any tough questions you may have. If existing franchise owners are enthusiastic about their work, that should show in their mentoring.
8. Find Out About Company Coaching
Does the franchise offer a well-structured and proven coaching program for new franchisees? Great franchisors should be invested in the success of their franchisees. If they don’t offer coaching, it may be best to avoid that franchise opportunity.
9. Acquire Protected Territory
When considering a franchise opportunity, you should determine if you can get a protected territory. If protected territory is not possible, that can severely impact your franchise income potential.
10. Make Sure You Are Comfortable
Perhaps the most important tip is to make sure that you are comfortable with the franchise opportunity you have selected. Look at the role of the franchise owner and what skills sets and traits make a successful franchisee. Does this fit with your experience and the role you want to play in your business? If you aren’t comfortable to the extent that you are able to utilize your skills and participate in the manner in which you plan to with the operation of your franchise, you don’t have to commit.
United Water Restoration Group Franchises
At United Water Restoration Group, we are invested in the success of our franchise owners because we know that we only succeed when you do! To learn more about our franchise opportunities, visit our FAQ page.
Ready to find success? Take the next step and become one of our franchise owners today.