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The good news is that in your search for a good franchise to own, you’ve found two franchise opportunities you’re very interested in. Now all you have to do choose the one you want to buy. But how?
I’ll show you.
Two Franchises
Based on the self-assessment you did, along with these 10 traits of a good franchise owner, you’ve found two franchises that you feel are a good fit.
The first one is a franchise business opportunity in the fitness sector. The investment is around $300,000, and you’ll need to be there from day one, managing the business.
The second franchise opportunity you’re serious about buying is in healthcare. In this case, your investment would be closer to $250,000, and you’d be out of the office in more of a business development role.
And even though they’re very different, you’re confident that you’d be able to successfully own and operate either one.
Given these points, the next thing you need to do is come up with a list of things to compare.
Comparison List
For each franchise, write down the answers to the following questions:
- How much is the upfront investment?
- How long to break-even?
- What will your role as the owner be? What will you be doing on a daily basis?
- What hours will you need to be there?
- How many employees will you need?
- How will you be able to grow the business?
- How many years is the franchise agreement?
- Will you be able to find a location, relatively fast?
- What are you hearing from franchisees about franchisor support?
- How much does the franchisor help with marketing plans etc.?
- Are the businesses affected by the seasons?
Dive into The Data
Next, it’s time to take a look at some of the data you have collected on both franchisors. Use the following questions to see how the franchisors are doing:
- Have they been adding new franchisees every year?
- Have they lost many?
- On average, how long does it take to become a profitable franchisee in each franchise opportunity?
- What do you get as a franchisee? What tools?
- What type of technology does each franchisor provide?
- How happy are the franchisees?
- What is the competitive landscape look like?
- Are the demographics in your area good for either franchise opportunity?
How Do You Feel About Both?
Once you have the data you need, and have examined it, it’s time to take a look at both franchise opportunities from the inside. From inside yourself. Do you have a better feeling about one of the franchises you’re interested in buying? Can you see yourself owning one vs. the other? What’s your gut telling you?
What about your spouse or partner? What are their thoughts? How does he or she feel about the franchises you’re trying to decide between? Can they see you owning and operating one vs. the other?
This is also very important: Which one seems to be a better long-term play?
In addition, when it comes time to sell, which franchise business will be easier to sell? Which one will be worth more money?
A Final Note
If you’re trying to choose between two franchise opportunities you like, make sure you look at all the data you’ve collected. And try to leave your emotions out.
Then, once you’ve had a chance to digest all of the information, visualize yourself owning each one.
Which one puts a smile on your face?
If both franchise opportunities do, call a few of the franchisees from both franchises (there will be a list of contacts in the Exhibits section of the franchise disclosure document). Share what you’re going through. See what they say.
Now, to be clear, it’s still your decision. Trust your gut and do what feels right.
The Franchise King®, Joel Libava, is a top franchise expert. He’s written over 2,000 different articles on franchise ownership and personally consults with people who are looking to buy a profitable franchise. Go here to find out how The Franchise King® can help you become your own boss.