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Nearly all franchise business owners have a prior working life, one that brought them to a new venture in a franchise. Some were mid-life career shifts, and some were soon-to-be retirees who didn’t want to sit in a recliner all day. As they considered their options, nearly every franchisee looked to franchising as a better way—a better way to live, work, and play.
Franchise choices can be daunting due to the sheer magnitude of possible selections. What makes a child-focused franchise better than a health and beauty franchise? We sometimes simplify the steps, but we know your franchise choice is an important one. So, let’s look at four tips for choosing the right franchise for you.
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Tip #1 Look in the Mirror
The most successful franchising models might not work for you. Why? Because you have unique motivations and preferences that influence your best franchise match. What is your “why?” Are you doing this to own a business, work part-time, build an empire, or get out of the house? Your answer matters greatly. If you need a break from children after home-schooling them for the past two years, a tutoring franchise makes no sense. If you are a retiring executive who enjoys sharing your knowledge, tutoring young people could be invigorating. Reflect honestly on your motivations so that you seek satisfaction in your franchise choice.
Then, consider your preferences regarding franchise longevity, daily work hours, and the franchise industry. Perhaps a 5-year plan for part-time work in a seasonal franchise fits your needs. That makes for a smaller pool of franchise choices, of course, but if that design is what you value most, you can seek what works for you.
Tip #2 Look in Your Wallet
Grand ideas and personal goals add to your business integrity. Unfortunately, however, we are always constrained by finances. Your financial situation will determine which franchises are available to you. You will have to qualify with enough net worth to open and operate a business, perhaps without profit, for months. Franchisors want to see success while you want to be satisfied and successful. When you understand your financial abilities (and disabilities), you and an appropriate franchisor will more readily advance your “why” into a satisfying partnership.
When you understand your financial range, go back to Tip #1 to understand how much risk you are willing to take. If you are financially stable, it could be difficult to risk what you’ve built (or you might feel freer to invest more than others).
Tip #3 Review Your Skills (and Joys)
Not every franchisee starts as an expert in their chosen franchise industry, but most have an affinity for the franchise’s focus. From auto mechanics to pet franchises, something out there appeals to your skills or enjoyment. You can stay in a safe field familiar to you or branch out into a new arena knowing that you have franchisor support. For some, personal skills or interests might not make any difference as long as the franchise matches the key determinants from Tip #1 and Tip #2.
Tip #4 Research the Franchisor
The first few tips focus on personal values. Once you are comfortable with your preferences and narrow your franchise choices, it is time to dig into the franchisor’s role in your future. The franchisor is a future business partner and must meet your expectations for mission, culture, and performance.
- Read and question every section of the Franchise Disclosure Document to understand fees, processes, time frames, territories, terms, and renewal.
- Review the franchisor’s financials. Projections and plans will influence where you fit into the whole company structure.
- Investigate legal issues. Disagreements happen with customers and competitors, but it should be a rare occurrence.
- Talk to current and past franchisees. Does their life mirror the reflection you saw of yourself? Ask about their relationship with the franchisor and if they are content with the support they receive.
Choosing to become a franchise business owner is an exciting option, no matter your motivations. With so many choices, your franchise can meet your personal and financial goals in an engaging industry if you follow these tips. As you step through the process, you will be clearer about the right franchise for you.
Anne Daniells is a co-owner of Enterprising Solutions, a professional services firm specializing in corporate communication and financial improvement for businesses where she shares decades of corporate and entrepreneurial experience—including franchise ownership—in her writings on business culture. She has authored hundreds of articles for publications including AllBusiness.com, TweakYourBiz.com, and MSN.com. Reach out via her website for more on where corporate culture, communication, and human architecture collide.