When an individual is laid off from their job, investing in a franchise business can be a great way to set down new roots and secure their financial future. But taking on the task of researching and seeking out the right franchise can be daunting. Knowing how to begin, figuring out which areas have the most potential and understanding the ins-and-outs of the franchise process, can be overwhelming, which is why the expert franchise consultants from the International Franchise Professionals Group (IFPG) are here to help. To better assist you in taking your next steps, we’ve answered some of the most common questions about finding and investing in franchises near you.
What sorts of franchises are available in my area?
The variety of franchises available to you will depend upon your location and the way the area’s business statics are trending. Generally, franchises fall under one of two categories – lifestyle or investment. Lifestyle franchises provide a lifestyle focus, usually based around a service or similar industry. Examples of these might include a pet-grooming business, gas station, salon, or another type of service-oriented establishment. On the other hand, investment-focused franchises are typically geared toward the individual looking to generate higher returns and reach higher sale goals. These would include your larger retail corporations, such as fast-food establishments, health clubs and auto repair chains.
What’s the best way to go about researching a franchise?
The best way to begin researching a franchise is simply to take a moment to assess yourself and come up with an idea of what may be a good fit. What do you have experience doing that you can leverage in a franchise? Are there any industries that you’re passionate about that you would like to explore further? Once you have a good idea of your skill set and parameters, you can then begin scouring the internet for potential franchises. Look to NADA (North American Development Agency) to find detailed information on new and existing franchises, as well as industry studies that can help you make an informed decision. The IFPG Franchise broker group also provides an extensive directory of existing and startup franchises, which is updated regularly.
What are the expenses involved in investing in a franchise?
The cost of investing in a franchise will depend on the company you’re looking into. Be sure to read all the documents that come with the agreement carefully and understand the fees associated with the contract. Generally speaking, however, there are three primary expenses that you should be prepared to pay: franchise fee, research fee, and closing costs. The franchise fee is typically a one-time payment that gives you access to the franchisor’s existing business model, as well as the right to use their trademarks and logos. A research fee is an assessment of market conditions that is usually paid after the franchise agreement is secured. The closing costs are the final expenses associated with closing the transaction and can typically include things such as real estate fees, legal fees, and other miscellaneous costs.
What are the best resources available for educating yourself on investing in a franchise?
The IFPG Franchise Broker Group provides a wealth of available resources for people who are looking to invest in a franchise. Our members have an in-depth understanding of the franchise industry, and can help provide information and guidance to potential investors. We also have a variety of webinars, events and seminars that you can leverage to further your education. When you join the IFPG, you will also have access to our online library of resources, which includes articles, white papers, FAQs and a directory of franchise businesses.
What issues should I look out for when investing in a franchise?
When investing in a franchise, there are a few important things to keep in mind. For starters, investigate the franchisor and the franchise system. Make sure that the business model is one that you can trust and supports the values and culture that you believe represents your ideal customer base. Secondly, review the franchise agreement carefully and make sure all fees and expectations are communicated clearly. And lastly, speak with other existing franchisees and ask them about the franchisor and their experiences. It’s important to understand the existing franchisee’s perspective, both good and bad, before you make a commitment.
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