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People approach me at franchise shows and send me emails asking what they need to do before purchasing a franchise. Over the years I've developed a checklist of the steps I recommend prospective franchisees take...
Conduct a Financial Overview
You'll need to know what you can afford to invest so you don't waste your time on opportunities that are out of your price range. While some franchises offer financing, you still must be able to afford the payments. Do a thorough and accurate assessment of your financial circumstances so you know what you have available to invest.
Research and Personal Assessment
Research is absolutely vital when you're looking for a franchise to invest in. Your first area of research is yourself. You'll need to ask yourself some important questions, including what areas you're truly interested in and what level of commitment you have toward owning your own business.
Once you've identified the best industry to get into, you'll need to thoroughly research opportunities. Get all the information you can from the franchiser and ask to speak to current franchisees.
Explore all Opportunities
Don't cross an opportunity off your list until you've completely looked into it. Evaluate all opportunities on different areas, including investment level, level of control and agreement terms.
Create a Plan
You'll need a solid business plan to move ahead in any franchise opportunity. Your overall plan should contain a business model, which covers the franchise ins and outs, while your financial plan should address all the finances. Speak to an accountant to get help creating a financial plan.
Find Your Dream Franchise
You should be passionate about the franchise you invest in. Don't just jump on an opportunity for financial reasons, as you must be completely committed if you hope to succeed.
Confirm What You're Getting
A franchise and a business opportunity aren't the same exact thing. A business opportunity will typically not include some of the advantages you'd expect from a franchise, such as trademark use and ongoing support.
Speak to a Lawyer
An experienced franchise lawyer can help you navigate the legal complexities of a franchise agreement. Speak to a lawyer before signing any agreement so you completely understand what you're getting and what is expected of you.
Know the Risks
A franchise location comes with risk, albeit less than if you started your own business. Your investment is not guaranteed and much of your success hinders on you. If you are someone who is not comfortable with any risk, then be honest with yourself about that.
Be Prepared to Follow the System
You'll need to follow the system the franchise has in place to increase your chances of success and fulfill your agreement terms. Be prepared to do things the way the franchise dictates.
Remember Your Loved Ones
Anytime you start a business, you're going to experience changes in your life. You may have less personal time in the beginning or want to include family members. Speak to your family about the opportunity so everyone knows what is going on.
Last but not least, be sure to give yourself a pat on the back! It may sound cliche but you are taking a step that most people dream of but are too scared to follow through on.
