5 Ways to Evaluate Your Franchise Options
When you’re just getting into the franchising game it can be hard to figure out whether or not an opportunity is right for you. Obviously before you actually invest you’re going to want to do in depth research and due diligence going through things like the franchise disclosure documents but there are a few quick and easy ways to evaluate whether a franchise is right for you.
Consider the costs and your financing options
Most franchises make the startup costs for their franchises pretty obvious. But you have to remember that these aren’t necessarily the only costs associated with starting the franchise. You also might also have to pay extra for equipment or for things like initial marketing costs. You need to make sure that you can afford these initial costs before you go ahead and try to open a franchise. The good news is that there are a ton of great options out there for financing a franchise. Once you figure out how much it will cost you to start the franchise take a look at how you would fund it. If you’re not able to afford it then you should cross it off your list. Franchises can be a great investment, so make sure that you can fund it before you go forward.
A great way to go and figure out whether or not the franchise you’re thinking about is the right one for you is to just go into a location and take a look around. Watch how things run. Talk to some of the employees or the customers. Figure out what day to day operations are like. If you have a big problem with the day to day business for any reason then it probably isn’t the right franchise for you. But if you go there and think that the business is great then it’s probably a good fit.
Go to a franchise expo
Before you decide to go and open up a franchise you should meet the franchisor you would be working with. There are several ways you can go about doing this, but the easiest way is probably to go to a franchise expo. There are a number of these throughout the year in various locations so find the right one for you. Once you’re there walk around and take a look at all the potential options, not just the one that you think is going to be the one. Talk to reps from each franchise and get an idea what is out there.
PS: The West Coast Franchise Expo is coming up soon. If you're interested in a franchise you should check it out.
Look at competitors and alternatives
Just because you think that you have figured out the right franchise doesn’t mean you should go for it right away. Take a little bit of time and step back and look at that franchises direct competitors. Think about what things you like about the franchise you’re interested in and what things you have questions about and figure out whether or not there’s a franchise out there that can do it better.
Think about what you do now
One more thing you’ve got to keep in mind when looking for your franchise is what type of franchise fits your personality. If you don’t like your current job then a franchise in the same industry might not be right for you. But, you might also be more successful in an area where you have experience. Just think about what you’ve done and what you want to do. Believe it or not many franchisees forget to do this step!
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Steps to improve the franchisee's profitability
Topics to be covered in this strategic audit should include at a minimum these ten (10) items:
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