Making a significant career change and becoming an owner of your own business is no small undertaking. But when you investigate franchising, you’ll find an option that can help you become a business owner while benefitting from the built-in infrastructure and resources of a franchisor.
For prospective entrepreneurs looking to invest in a franchise business, the International Franchise Professionals Group (IFPG) provides the knowhow and support you need to make the right decision. Our purpose-driven mission is based on integrity, ethics and collaboration, working with over 1,300 franchisors, franchise consultants and vendor members to help aspiring business owners through the process of identifying viable opportunities in the franchise sector.
This article will explore the basics of franchising, the questions you need to ask to help ensure you find the right business for you, and how the IFPG can support you as you embark on your journey to business ownership.
What Is Franchising?
At its core, franchising is a form of business agreement that allows someone to open and operate a business with the support and consultation of a franchisor. Franchisors are businesses that have already established a brand, culture, system and business model that is replicated across different geographic areas to increase their footprint and business potential.
In a traditional franchise agreement, the franchisor licenses the rights and name of the business and grants a franchisee the right to use the franchisor’s know-how and methods to open and maintain an independent, licensed business. Franchisees typically receive usage rights and benefits such as access to a business’s supply chain, training, and assistance services as well as support with advertising and marketing.
Pros and Cons of Franchising
Franchising is a great option for entrepreneurs who have the necessary capital and resources to operate a business but lack the necessary industry know-how. Working with a franchisor eliminates the risk associated with launching a new business and leads to greater success as the franchisee has access to all the resources and tools already put in place by the franchisor.
The downside of franchise opportunities is the considerable upfront cost, including franchise and royalty fees. Franchisees are also required to maintain the standards set by the franchisor, regardless of their own goals or initiatives. Moreover, the licensee may only operate within a certain geographic area or business space, meaning they won’t have the same level of freedom as independent business owners.
Questions to Ask Before Investing in a Franchise
With so many options to consider, it’s important to ask the right questions before investing in a franchise. Here are a few that should help you get started:
• What is the initial and continuing investment required?
• What support does the franchisor provide?
• What type of training and operational support do they have in place?
• What opportunities are there for expansion?
• What are the fees and terms of the franchise agreement?
When considering any franchise opportunity, the IFPG recommends prospective business owners research the franchisor in depth, conduct a thorough due diligence process, and leverage the experience and skillset of a franchise broker to help ensure a successful transition to small business ownership.
How IFPG Can Help
The International Franchise Professionals Group is a membership-based franchise consulting network with a commitment to ethical and collaborative business practices. Our organization’s purpose-driven mission is based on integrity, ethics and collaboration, and our diverse team of brokers works closely with aspiring business owners to identify viable opportunities in the franchise sector.
Our seasoned brokers have extensive experience working with a variety of franchisors, from start-ups to major multi-state operations. IFPG members are provided with proprietary online resources that can facilitate research and inquiry, including detailed information about working with a franchise broker to find the right opportunity.
Whether you’re considering a franchise in the healthcare, food, or education industry, you can rely on the IFPG to provide the resources and support you need to select the best business opportunity.
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