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Franchising in 2023

As the coronavirus pandemic continues to ravage small businesses, the resulting corporate layoffs, cost-cutting, and diversification strategies have left many Americans wondering how to pursue their dreams of business ownership in 2021 and beyond. With the uncertainty of the economy and a unique set of challenges on the horizon, now is the time to be informed about the options available as investors look to the future of franchise business ownership in 2023.

The International Franchise Professionals Group (IFPG) is a membership-based franchise consulting network with a purpose-driven mission to guide aspiring entrepreneurs through the process of selecting and investing in a franchise business. Here we examine the most common questions facing potential franchisees in 2023 and the considerations to keep in mind when considering franchise business ownership.

What Are the Pros and Cons of Franchising?

The potential upside of investing in a franchise business comes with several major advantages. Most often, the structure and stability of an established business framework and brand name provide franchisees with the opportunity to generate income and build wealth quickly. Additionally, most franchisors offer significant support when onboarding, training, marketing, and other key functions of a small business.

While the support and brand recognition that comes with a franchise business may appear attractive, there are several potential cons that should be considered. As a franchisee, there is often a significant upfront cost involved in the acquisition of the franchise, and ongoing fees may also be a burden. Furthermore, a franchise business is heavily tied to the success of the franchisor, and individuals may find that they have less control than they bargained for regarding future strategy or decisions.

Is Franchising Right for Me in 2023?

The decision to pursue a franchise business should not be taken lightly. Before committing to an investment, individuals should consider the amount of liquidity they have available, how much risk they are comfortable with, and the type of business they are interested in. It is also important to understand the impact of the pandemic on the economy and the industry as a whole. Finally, potential franchisees should carefully analyze the support and guidance that the franchisor is offering and to what extent those resources will help a franchisee meet their goals.

What Are the Most Common Types of Franchises?

Different types of business models exist within the franchising category, making it possible for aspiring business owners to explore different opportunities. The most common types of franchise businesses include restaurants, retail stores, hotels, fast food, service businesses, and home-based businesses. Aspiring business owners should carefully research industry trends, expected growth, and costs associated with specific types of franchise businesses.

How Do I Find the Right Franchise for Me?

The process of finding the right franchise begins with critical research. Understanding your financial and business goals is the first step in narrowing your focus. From there, you can identify the type of business that best meets your criteria and research a portfolio of franchisors.

The IFPG business portal is a great resource for researching franchises in specific sectors, with detailed information about franchisors, franchises for sale, and investment costs. Taking advantage of the platform’s free franchise consultation service is also a great way to connect with veteran franchise brokers and get unbiased advice.

Once you have identified an opportunity, you should make sure that the franchisor is registered with the Federal Trade Commission (FTC), asking for references, and studying the franchisor’s annual Franchise Disclosure Document.

Topics:

Franchising,

Post-COVID Economy,

Investing in Franchises

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