Opening a franchise can be a great opportunity from a number of perspectives. It can be a great investment, it can be a crucial life change, and it can be fun! But, opening a franchise is also a pretty significant investment for most people. You don’t want to go through all of the time and effort to find a franchise, put down the necessary money, and then realize that the franchise wasn’t right for you. Here’s a few things you should watch out for while hunting for your franchise and some tips on how to avoid them.
Don’t Spend Beyond Your Means
It seems obvious but it’s something you need to be aware of. Make sure you have a good idea of how much you are able to spend on your franchise and how much you can expect the franchise to make. This doesn’t mean that you are limited by the financial resources you have one hand because there are many great options out there for financing a franchise, but it does mean you should be very diligent when considering these options. As we’ve talked about in the past you should always analyze a franchises’ Franchise Disclosure Documents carefully before investing in a franchise. These can give you good insight into how much you can reasonably expect your franchise to make in a given year and can give you an idea about what various fees are associated with operating the franchise. If you figure out how you can safely finance your franchise and have a reasonable idea about how much your franchise can make then you should be in pretty good shape from the financial side of things, but that’s not the only potential consideration when opening a franchise.
Don’t Blindly Dive In
The first point I made ties into this, but you need to make sure you’ve done your research before you go ahead and sign a franchising agreement. And that doesn’t just mean from a financial perspective. There are so many other aspects in running a franchise that you need to understand before you get started. Most of this information can be found in the Franchise Disclosure Documents. Some of the most important things you should take a look at would be any legal issues the franchisor might have and the churn rate of franchises. Both of those could potentially be pretty significant red flags that might make you want to reconsider whether or not you want to open that franchise.
Don’t Do Something You Don’t Love
This is a big mistake that a lot of people make with their careers, whether it’s for an a college grad going into entry level job or for people looking to open their own business. If you’re going to make an investment into a franchise you should be passionate about what you’ll be doing. Running your own business can be a lot of work and can be stressful at times. But if you are passionate about it then it can be incredibly rewarding.
Interested in opening a franchise but not sure where to start? Try our free franchise matching quiz and find the perfect franchise for you!
Social Media Will Sell Your Next Franchise. Just ask the Former VP of Marketing at the IFA
Franchisors need to have guidelines for franchisees when it comes to using social media, but to date, most have not put together formalized play books for franchisees to follow. There are plenty of things you can do so your franchisees can create innovative marketing strategies using Twitter, Facebook, location based networks, blogging, etc., as long as they understand the guidelines of the franchisor first.
Why Should I Open a Franchise Rather Than Open My Own Business?
America has always been the land of free enterprise, and the prospect of self- employment may sound like a dream come true. Imagine the schedule flexibility, the freedom to explore and expand while pursuing an interesting career. The alleyways of entrepreneurship are so vast that it can be rather daunting to entertain. What is the right business for today? What product is in demand? Which business model is most profitable? What concept is most likely to succeed? Potential owners also must consider that franchising may be a better option than small business start ups. Yes, when entrepreneurship meets franchising, the parameters change. There may still be freedom, but new franchisees find themselves absorbed into a preset business model with a tried and true support system.