Multi-Unit Franchise Experts

A Brief Guide to Questions on Owning a Franchise

Anxiety and excitement often go hand in hand when considering a career change to owning a franchise. Amidst the challenge of the unknown, you may have a million questions about what this transition would entail and want to arm yourself with as much information as possible. If this is your current situation, you can rest assured that you are not alone. The International Franchise Professionals Group (IFPG) is a membership-based franchise consulting network with more than 1,300 franchisors, franchise consultants, and vendor members who are available to help you through the process of investing in and owning a franchise business.

Your primary source of information, though, should be your own research. This research should include reading and understanding all of the aspects of a potential investment, including examining the franchise disclosure information provided by the franchisor. It can be tempting to jump into a franchise as quickly as possible, but taking the time to research is important for making a wise investment and ultimately creating a successful franchise business. Furthermore, there are common questions that you should ask yourself if you are considering investing in a business franchise.

To help you in the process, we’ve put together this comprehensive guide to answer some of the most commonly asked questions when it comes to investing in a franchise business. The goal of this guide is to provide an overview of the process, as well as an understanding of the commitment and processes associated with owning a franchise. So, let’s get started!

Questions to Ask Yourself

The first question you may have is whether or not a business franchise is a good fit for you. The IFPG provides a free online assessment to evaluate your lifestyle and determine if owning a franchise is a viable option. Your answers to the questionnaire will determine if this type of career move is suitable for you.

Once you have determined that you would be a good fit for owning a business franchise, the next step is to research the franchise that interests you. Ensure that you fully understand the background of the franchise, its business model, its potential for growth, its industry, and its customer base. Also, be certain to read through the disclosure document to make sure that you are aware of the fees associated with owning the franchise, as well as any additional costs or obligations to the franchisor.

When researching a franchise opportunity, bear in mind that most franchisors will require you to have a certain amount of capital available in order to purchase and start the business. Some franchisors may offer financing, but certain lenders might also require you to have some of your own capital available in order to qualify for financing. Further, prior to signing the franchise agreement, many franchisors will require that you complete an in-depth application process.

Do Your Due Diligence

Aside from researching and evaluating your own qualifications, taking the time to review the franchise agreement—the legally binding agreement between you and the franchisor —is essential to the success of your investment. This document outlines the responsibilities and expectations of the franchisor and the franchisee. Make sure that you understand the document in its entirety and that you’re able to commit to the expectation that it sets out.

Even after signing the agreement, it’s important to remain involved with the franchisor by constantly staying in contact and discussing any emerging issues or concerns that you may have. The more you communicate with the franchisor, the more connected you will become and this can help provide you with the support and resources you need to succeed as a small business owner.

Finally, don’t forget to consult with a lawyer and an accountant who specialize in franchise law and finance before deciding to invest in a business franchise. A lawyer and accountant can help you go through the details of the franchise agreement and also ensure that you are adequately prepared to take on the financial responsibility of owning the franchise.

Final Advice for Investing in Franchise Businesses

The decision to invest in a franchise can be overwhelming, but it doesn’t have to be. By taking your due time and effort to research and engage with the franchisor, you can arm yourself with the knowledge you need to make the most informed decision possible. Investing in a business franchise is a big step, but it can ultimately lead to a new career and a stable future if done correctly.

Topics:

Franchise,

Investing,

Business

Download your free copy!

And learn to evaluate franchise concepts like an insider.

Request a Franchise Evaluation