Posted on Oct 17, 2010
18 Must Answer Questions for Anyone Considering a Franchise
Choosing from over 2500 existing franchises, it becomes really necessary for the potential franchisee to choose a franchise which works according to their strengths and does not become a cause of misery in the future. As everyone has a different personality and preferences it comes as no surprise that a franchise deemed as perfect for one person may not be considered so by someone else. Hearing these statements by 2 IHOP franchise owners clearly shows the difference in attitude.
“Every morning when I get up, I am just tingling to get to this place [his IHOP restaurant].” --IHOP franchisee since 1972
“Why work the long hours only to walk away with $40,000 a year, if you are lucky? This restaurant is open 363 days a year, 16 hours a day. It is too much.” --IHOP franchisee since 1990
Before starting your franchise, you should first prioritize not only the business and industry that you wish to enter, but also prioritize your work hours and the nature of work that you are willing to do. Since you are choosing a career for the rest of your future then it is best you analyze your limitations, the capabilities and your specific needs before settling on a franchise. You need to evaluate whether you can meet the requirements of the franchise and whether they meet your priorities or not. The dissonance between the two would lead to a dissatisfied work attitude and would snatch the reason for starting your own business in the first place.
To help with identifying the important priorities, you can go through the following points and state your views regarding them. That way you would have a checklist by which you can verify the correlation of your franchise with your priorities.
Worksheet for Setting Priorities
Answering these questions will give you a good start toward setting priorities for a franchise choice.
- Where will the business be located? In the city, the suburbs, the countryside?
- Do I want to commute? If so, what are the time limits?
- Do I want a home based franchise?
- Do I want to work five days a week? Six or seven? How many hours per day?
- Do I want to be an absentee owner?
- Is there a specific industry I want to work in?
- Are there any industries, products or services that I will not work with under any circumstances?
- Are there any specific characteristics that must exist in the business?
- Do I want a product or service franchise?
- Do I want a new or an established system?
- Do I want a large or small franchise system?
- Do I want a system with slow and steady growth or a rapid growth one?
- What kind of attitude do I want from the franchisor? Paternalistic? Dictatorial? Collegial? Laid back?
- How important is name recognition? On a regional or national basis?
- Will I be happy with one or two franchised units or do I want to own multiple units or develop an entire area?
- How much can I realistically invest in a franchise (money that does not have to be borrowed or raised elsewhere)?
- How much should the total investment be?
- Do I need to find a franchisor that offers a low-interest financing program or has an established third party financing relationship?
You may add further questions when setting your priorities deeming aspects of business which would affect your work more significantly. This could include concerns such as can the franchise become a family business or whether you’d need skilled workers. Similarly other factors could be considered as well depending on your personality and your own preferences. By answering these questions you can set your priorities and then narrow down your search to franchisors who offer businesses meeting your conditions.
Even though this seems as the most basic step, most people fail to consider these factors when making their choices thus leading to problems further on in their business. It is best to consider all the future possibilities and aspects when you haven’t been tied into any agreements or conditions. Spending time on these questions earlier with help save you countless hours worrying in the future.
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