Posted on Sep 09, 2013
5 Tips for Finding the Right Franchise
So you’ve decided that a franchise is the right path for you? Now comes the exciting part—choosing among hundreds of franchise opportunities. Here are questions to ask yourself to help narrow the field:
- What captures your interest?
If you’ve always been a gear head, maybe a Jiffy-Lube or Snap-on Tools franchise would be right for you. If you love to travel, it may thrill you to help others with a cruise planning franchise or similar travel-based brand. On the flip side, no matter how great the ROI is, if fast-food makes you queasy, you probably won’t be happy being a burger-and-fries franchisee.
- Do you want to run a business from home?
Home-based franchises have relatively low start-up costs. Some of the most successful are in the commercial cleaning category (Jan-Pro, System4, and Vanguard are Entrepreneur magazine’s top three home-based franchises for 2013). Tools, lawn care, and travel planning are also great opportunities.
- Does this product or service have staying power?
Franchises that are hot right now may not be in a decade. Check into recession-proof services (pipes will burst, cars will break down, and people will spend money on their kids and pets no matter what) and franchises that target growing population sectors such as seniors and Latinos.
- How much do you want to invest?
There are franchise opportunities in nearly every price range from a big-ticket McDonald’s ($1.03M) to home-based, low-startup cost franchises that you can get into for under $10K such as CruiseOne or Jazzercise. Getting a business loan is an option, as is rolling over a retirement account to fund a franchise. The latter is complex if you want to avoid taxes so it’s best to obtain professional help.
- Is the franchise a good fit?
When you’ve got your options narrowed to one or two, you’ll want to do some serious homework on the franchisors including talking to current and former franchisees, carefully reading over the Franchise Disclosure Document looking for red flags, hidden fees, and any history of litigation. It may also be prudent to seek the help of a franchise consultant—their services are typically free and they know the industry well.
Once you’ve completed your soul-searching about the kind of business you want, narrowed the field, done due diligence on all the details and finally made your decision, take a deep breath and step into your future with confidence.
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