Franchising isn’t solely a lane of entrepreneurial ownership for first-time business owners, but also an exit strategy for recently-unemployed corporate professionals. The International Franchise Professionals Group (IFPG) understands how stressful and uncertain corporate layoffs can be, and our purpose-driven mission is to guide aspiring business owners through the process of identifying and investing in franchise businesses.
Investing in a franchise is an appealing option for many who have been laid off, as more and more corporate job opportunities require a set of skills that cannot be obtained from a simple post-secondary education. Through franchising, an experienced professional can maximize their expertise and industry knowledge and apply it to his/her own venture.
Whether you’re considering a franchise to supplement your primary income, or for an employment change of pace, there are several key components you should keep in mind when making this important decision. This comprehensive guide to franchises will walk you through the process of franchising from start to finish.
First, you’ll need to assess which types of industries they should explore. This will require you to take into account both your personal and professional interests and preferences. Once you understand which franchise opportunity may be the most viable for you, the next step is to determine the characteristics that you deem most important in a franchise company. Then, you’ll need to evaluate and select specific, individual franchise opportunities that meet your criteria. Finally, you’ll need to understand the buying process and timeline of your selected franchise.
To answer any of the questions that you may have throughout your Franchise Selection Process, we’ve compiled a comprehensive list of Frequently Asked Questions (FAQ) and their answers to help you make an informed decision.
What Makes a Franchise Special?
While the corporate job market is far from stable, franchising offers an impressive amount of stability and security. Many people who want to own their own businesses choose to purchase and open franchises because of what the industry has to offer:
1. The brand-name recognition is already established: Purchasing a franchise can also give you access to well-known and respected brand-names, making it much easier to get customers on board once you launch your new business.
2. Financing options are more favorable: Banks are often more willing to lend to franchisees than to start-ups.
3. Support systems are in place: Franchisors have already done much of the hard work for you, from setting up operations systems to identifying suppliers.
4. Franchise-specific regulations are in place: It is important to note that franchises are regulated by a set of laws and regulations that must be followed in order to ensure success.
How Much Does It Cost to Buy a Franchise?
The cost to buy a franchise can vary depending on the size and scope of the business. Generally, the cost includes an initial franchise fee, which is a lump sum paid to the franchisor when the agreement is signed. The cost of this fee is defined in the franchise contract which outlines all of the terms and costs associated with the franchise agreement. In addition to the franchise fee, franchises may include ongoing royalty fees (a percentage of sales) and marketing fees. Start-up costs, such as building out store locations (if applicable) could range from tens of thousands to millions of dollars.
Where Can I Find Potential Franchise Opportunities?
The IFPG offers a free, login-free franchise search tool that allows potential franchisees to browse and filter through a wide selection of franchise opportunities. In addition to our search tool, prospective franchisees can find information on potential franchise opportunities through various franchise industry sites and professional networks, such as franchise expos, franchise blogs, webinars and conferences.
What Are the Steps Involved in Buying A Franchise?
Once you’ve identified a potential franchise opportunity, the next step is to begin the franchise buying process. Here’s a quick overview of the steps you’ll need to take:
1. Research initial franchise options: Take the time to research and review several franchise opportunities.
2. Request information: Submit an inquiry from the franchisor for detailed information on the franchise.
3. Ask questions: Contact the franchise directly to ask any questions you may have.
4. Complete due diligence: Perform thorough due diligence and research on the franchise.
5. Make a decision: Decide if the franchise opportunity is right for you.
6. Secure financing: Determine a financing plan for the purchase.
7. Sign the franchise agreement: Sign the franchise agreement and begin the business process.
What Type of Support Will I Receive From The Franchisor?
Franchisors provide varying levels of support to franchisees, depending on what is agreed upon in the franchise agreement. The franchisor may provide comprehensive training, operations manuals, marketing materials, software systems, and other resources to make sure that you have the tools you need to run your business successfully.
Do I Need Any Special Qualifications?
No, some franchise opportunities do not require any prior business experience or special qualifications as long as you have the financial capacity to purchase a franchise. Most franchisors will provide you with in-depth training and assistance during the process of opening your franchise.
Concluding perspectives
For corporate layoff professionals assessing their options for the future, franchising offers an attractive option. Investing in a franchise can provide you with the stability and resources that you need to become a business owner. As you embark on your franchise search and selection process, it is important to note that there are several key components you should keep in mind when making this important decision, including the cost, industry, type of franchise, and more.
If you have any additional questions or would like more information on franchising, the IFPG franchise brokers are available to provide guidance and support throughout your franchise journey.
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