Franchise Opportunities – Where do I start?
Choosing a franchise can be a positive experience or a shot in the dark investment. Like most decisions, a systematic process for exploring and evaluating your options makes it much more likely that you'll be happy with the outcome. This guide will make your research faster, easier and more productive.
Business Franchise Opportunities - Self Assessment
Before looking at the vast amount of franchise information on the web, take a look inward.
- Available Capital – Will you be financing your franchise on your own, or considering loans? Franchises often require new franchisees to have far more capital than they'll typically use, because insufficient capital is the number one reason for franchise failure. Here are a few popular financing options you might consider:
- Franchisor Loans: Some brands offer to finance their franchisees.
- SBA Loans: The Small Business Administration offers loans to qualifying applicants.
- Commercial Bank Loans: Available at your local bank branch.
- Time Commitment – Many franchises require an owner to be present for a majority of business hours. How many hours are you able to commit?
- Goals – Why are you starting a franchise in the first place? Most people go into the process with something specific in mind, and recognizing that is critical to fulfilling it.
Top Franchise Opportunities - Industry Assessment
Analyze the industries you're interested in to make sure you're picking one with good opportunities.
- Historical Trends – Has the industry been growing in recent years? Are franchises in the industry successfully adapting to changing customer demands?
- Short-Term Projected Growth – The first few years are going to be a struggle for survival as you build a customer base and awareness for your franchise. You don't want to be competing for a shrinking market during this period.
- Long-Term Projected Demand – Will your services still be in demand in 15 years or however long you plan to work?
Best Franchise Opportunities - Franchise Assessment
Common Mistakes to Avoid
- Don't limit yourself to franchises you're familiar with. A franchise offers a lot more than brand awareness – proprietary tools, training, marketing, and methods should be a major part of your selection process.
- Don't write off a brand just because its franchise fee or capital requirement is above the industry norm. The franchise fee usually reflects the level of value you should expect to receive.
Bottom Line: Give more weight to the services the company offers than your initial impression.
Steps to Get Started
- Browse through the opportunities in your industry. You can access our database through the 'Search By Industry' tab at the top of this page or narrow your search to our low cost franchises.
- Review the capital requirement to make sure you qualify.
- Pick out about 5 to explore further and you're well on your way.
18 Perfect Businesses for The Modern Day Man
The Krystal Klear Water franchise specializes in providing clean, mineral-rich drinking water to their customers through specialized water filtration systems. Franchisees provide water contamination testing, preventive maintenance, and in-home, naturally purified water. The health and fitness nut will love this franchise because Krystal Klear's water systems have less pollutants than the competition. The systems are also low maintenance and do not add salt to the water like other water softening systems. This residential water filtration supplier targets an annual market size of approximately $2.6 billion, with sales growth projected to grow at rates of 6-8% per year. Sounds like the same amount some gym rats spend at GNC each month.
5 Traps for the Unwary Prospective Franchisee
When evaluating a potential franchise opportunity, prospective franchisees need to take care to put the hype and their emotions in check, and carefully consider all factors relevant to their buying decision. After all, the franchise will be a 5- to 10-year relationship (at minimum, under most franchise agreements), so it is well worth the investment to put in some research and analysis before taking the leap.
Know Before you Go – Non-Compete Provisions in Franchise Agreements
In general, non-compete provisions state that the franchisee will not, during the term of the franchise agreement and for a reasonable period thereafter (typically two or three years), own or be involved in any “competitive business.” What constitutes a “competitive business” will vary from franchise system to franchise system, but most franchisees can generally expect to be prohibited from taking part in any business that offers goods/services that are either identical to or competitive with the goods/services offered under the franchise system. Non-compete provisions must be limited in geographic scope, and generally cover a set radius (usually somewhere around 5 to 25 miles) around the former franchised outlet, and possibly also the outlets of other existing franchisees.