Investing in a franchise business is often the perfect way to combine professional aspirations with the goal of spending more time with family. It is often much easier to acquire a franchise business than it is to start a business from scratch. However, beginning the process of investing in a franchise presents many questions that might be difficult to know the answers to. In this article, the International Franchise Professionals Group (IFPG) seeks to answer some of the most frequently asked questions aspiring franchise business investors have about investing in a franchise.
When researching a franchise business, the overwhelming amount of information can be intimidating. One of the most important questions to ask and answer: “How do I know which franchise is right for me?” Many factors must be considered before investing in a franchise business. A franchisor will provide data on the location, overhead costs, time needed to operate, start-up costs and many other points of interest. If more complex issues arise, like contract negotiation and equipment rental, you may need to enlist the help of a franchise consultant. Engaging with a knowledgeable franchise consultant can provide the resources and information necessary to make an educated decision.
Another question often asked from prospective franchise business owners is: “How long will be the process to acquire a franchise?” Every business is different, but most franchise agreements will take between a few months to a year from start to finish. The length of time largely depends on the existing requirements from both the franchisor and franchisee, along with the preparation of the documentation, legal team and other operational necessities. It is also important to note that most franchises require existing capital to cover the whole process.
Perhaps a more general question, yet a useful one to ask, is: “What type of franchise should I consider?” Franchisors line up a whole range of opportunities when it comes to investing. It is encouraged to research what type of sector interests you most. The typical franchise businesses include food, retail, service, health, fitness, education, hospitality, entertainment and other types of business. Determining your field of interest and researching the available franchising opportunities therein is advised, although it is also important to remain open minded to businesses you may not initially have considered.
One last key question many potential franchise business owners have is this: “What post-investment expectations should I have?” Once the process of acquiring a franchise business has been completed, it is important to go in with the right expectations and be aware of how to define success. It is also important to take into account ongoing franchisor fees and other membership obligations. Furthermore, you must also review the goals and plans you set for yourself when starting the process. A franchise consultant can help structure your goals and be a valuable post-investment resource.
Investing in a franchise business provides many advantages that no other business can boast. It combines the freedom and independence of owning a business, with the resources, expertise and support of a larger organization. As a franchisee, it is important to remain informed and ask the right questions before and after investing.