Are you feeling unfulfilled in your corporate career and think that owning a business is the path for you? If so, one potential route to consider is franchising, which comes with its own set of questions and considerations. As part of the International Franchise Professionals Group (IFPG), we’re here to provide insight on the process and to assist you in identifying and investing in the right franchise business.
Let’s start by looking at some of the key questions to ask before investing in a franchise.
1. What Franchise Model Is Best for Me?
The right franchise model for you will depend on a few factors, including how much capital you have and how much risk you’re willing to take with your investment. Evaluate each model to understand the types of start-up costs, ongoing expenses, and expected throughputs that each one requires.
2. How Much Money Will I Need to Start the Franchise?
Part of understanding the model that’s right for you is understanding the money you need to invest. There’s no one-size-fits-all answer here, but be sure to calculate the franchise fee, start-up costs, legal, accounting, and marketing fees, as well as operational and staffing costs. When doing so, consider the total cost of the investment as well as the ongoing franchise royalties you’ll need to pay to the franchisor.
3. Do I Have Access to the Right Talent and Suppliers?
Having access to the right talent and suppliers can make or break a business. As you research potential franchising models, research those key supports, too. Do they have positive reputations and do the right people, products, and services exist for you to get the job done?
4. Is the Franchisor Supportive?
When you’re in business for yourself, you’re in partnership with the franchisor. You’ll need training, support, advice, and access to resources. Ensure that you’ll receive full support in the franchise package so that you’re never under resourced come launch time.
5. Are There Any Unique Risks Related to This Business?
Each business carries its own unique risks. Building a fitness franchise in a city known for its lack of outdoor pursuits carries a different financial risk to launching a food franchise in a region known for its bakery culture. As such, understand any risks associated with the business you’re considering.
6. Does the Franchise Have A Track Record?
If the franchise you’re considering has other locations, try to dig into the performance of those other franchises. This can provide insight into how successful the business could be, though ultimately, it’s down to you to manage the daily operations and marketing.
7. How Quickly Can I Expect to Turn A Profit?
It’s also important to understand how this business could turn a return. Ultimately, this will come down to the model you’re investing in and the market you’re investing in, both of which will require careful research.
8. How Quickly Can I Give Notice on My Current Career?
Finally, if you’d like to transition out of your current corporate role, consider how long you should stay in your role to set you up for success. Often, transitioning too soon can make it difficult to build the franchising business while also having something to fall back on in case of a hitch.
With an understanding of these key questions to ask, you’ll be in a better place to determine whether or not franchising is the right career path for you. And as part of the IFPG, we’ll be with you every step of the way.