The business model of franchising is one that’s consistently held in high regard by most business experts. That’s because it works. Is that why you’re thinking about buying one? You’re also investing in a franchise because;
- You want to have more control in your professional life
- You want a business of your own
- You wish to follow someone else’s business system
- You want to get to market quickly
- You don’t want to be alone in your venture
- You want to build equity
If you choose the right franchise business opportunity, you’ll have a good shot at being successful.
But, let me be a little more specific about “the right franchise opportunity.”
For an opportunity in franchise ownership to be right for you, it must meet the following criteria;
- The business type must be one that you can really “see” yourself in, long term
- The specific skills required to run the franchise must match up to your own set of distinct skills
- The opportunity must fit well within your budget
- The geographic area you’re thinking about opening it in must be right for the business
- The timing has to be right for your stage in life
Do those 5 things make sense? Can you see why they’re so important?
When you start *shopping for a franchise, try to really visualize yourself in the business. You’ll save yourself a lot of time. For example, owning a McDonald’s franchise may sound great at first, but can you really see yourself behind the counter of a busy fast food restaurant in which 75% of your employees are under the age of 18? (I’m not saying that working with teenagers is bad thing. Just ask yourself if it’s what you want to be doing for the next 10-20 years?)
Make sure that you find out exactly what skills are needed to operate the franchise you’re thinking of buying. If you’ve come from an operations background, and most of your work consisted of behind the scenes management, investing in a business to business franchise may not be the right fit. For example, franchises that specialize in providing personnel services to other businesses require heavy outside sales work. If you’ve never made 10 sales calls a day, you may want to think twice about a business to business franchise. Make sure your skills match the skills you’ll need as the franchise owner.
Not only will the *total investment of the franchise business need to be in your comfort zone, but you’ll need to have 6-12 months of living expenses set aside, while your new business takes off. Lots of folks that I’ve worked with in the past have needed this gentle reminder. Your start-up franchise won’t be making any profit for a while, in most cases.
Will the franchises that you’re looking at be right for your community? If your town already has 8 different dry cleaning stores, will there be enough business for your franchise to survive? Or, maybe you’re thinking of bringing a “healthy food” concept to your area? Are your neighbors ready to change their eating habits? Once again, it depends on the area. Denver, Colorado and Buffalo, New York have really, really, different tastes in food. Is your community ready for the franchise you’re thinking of buying?
Finally, is this the right time in your life to take a risk like this? I’ve had many people come up to me after one of my presentations on franchising and tell me that they’d love to become their own bosses, but the timing’s just not right. For instance, maybe your three children are still in various stages of their college careers, and you just have too much money going out to pay for their education. Sometimes, it’s in the timing.
There are lots of great reasons to buy a franchise. Try to have enough things going for you when you actually do end up buying one.
*Non US Government links
Check out the SBA’s Consumer Guide to Buying a Franchise
(The Franchise King®, Joel Libava, is president of Franchise Selection Specialists Inc. Joel provides franchise advisory services to those interested in exploring franchise ownership. He also provides content and social media strategy and services to the franchise community. He’s frequently called on by the media for his no-spin insights on the world of franchising. You can follow Joel on his award winning blog-The Franchise King Blog.)