How to open a franchise businessOctober 3, 2019
For those who have the money, there are many ways to get into a franchise business for any industry. There are many pros and cons to getting into a franchise, but it is important to know where you’re going.
The easiest way to open a franchise is to start planning. Without adequate planning of your timeline and budget, it is easy to get sidetracked and spend a lot more for your business. You may get sucked into a franchise with easy talk, instead of by doing good research on your industry. If you care to make a profit, you will do your market research thoroughly before you pick up the franchise listings.
Chances are, you know what industry you want to get into. This is important, since it narrows down your target market and clientele. You probably have an even better idea of where you want to do business. For some, such as folks retiring from a previous career, this will be the most influential factor. Hence, you should do research on your local area markets as well. Don’t bet on a losing horse before you get to the races.
Selecting a business
It is often a good idea to meet with some people who can give you business advice. If you have a friend who understands business plans, you should talk to him or her. A franchise business needs to have a solid business plan before it enters negotiations. Often times the franchise owners will wax on about the features of their business, without really explaining to you what it takes to enter their industry. You absolutely need to learn a bit about consumer marketing if you are to succeed. I often see franchise owners who are in over their heads, and they don’t understand what it takes to play the game. Even though the franchise owners will support franchisees, it is up to you to run the store. This is only slightly different from opening your own brick and mortar store. Once you are sure a franchise is what you can do, then proceed by all means.
Finding a franchise
You can find listings of franchises in magazines that are aimed at people aspiring to start a business. One good resource is Entrepreneur. Another good resource for businesses in the states is Inc, Magazine. They have detailed listings of available franchises, often by price range. Remember that franchise owners actually do make a good sum of money from the actual licensing process, so it an expensive franchise does not mean a good franchise. Franchises are good at taking money from franchisees. They often will charge monthly fees from your small business revenue. You should also be careful at the franchise items you pick up for the business itself, to see if each item is needed.
Even if the franchise you are considering is not a public company, perhaps you can ask to see their financials. If you don’t know how to read financial charts, then find a friend or learn. If the headquarters of the franchise is not making money, chances are it is not worth your time and will bring lots of heartache.