Multi-Unit Franchise Experts

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Q&A on Franchises for Corporate Layoffs

If you’re looking for a new business opportunity after a layoff or another form of corporate upheaval, franchising may be a great fit for you. Franchises are a highly organized business model that offer a great potential for growth and success, but require a significant initial investment. Many aspiring business owners have questions about the process of researching, evaluating, and ultimately investing in a franchise, so the International Franchise Professionals Group (IFPG) has taken the time to answer some of your most frequently asked questions about franchises.

What exactly is a franchise business?

A franchise business is a licensed arrangement in which a franchisor grants a franchisee the right to use the franchisor’s trademarks, method of operation, and other assets to open, operate, and manage a business. The franchisee typically pays an initial franchise fee and a continuing royalty fee while adhering tooperating guidelines and standards set by the franchisor.

What are the benefits of investing in a franchise business?

There are a number of benefits to owning and operating a franchise business. Investing in a franchise business allows you to capitalize on an existing market, as well as access existing products and services, supply lines, and training support from the franchisor. Additionally, franchises often require fewer resources than other businesses, as they leverage the infrastructure and name recognition of the franchisor. Lastly, franchising is often easier to finance than independent businesses, as franchises are usually considered less risky.

What should I take into account when evaluating a franchise business?

When evaluating a franchise business, it’s important to clearly assess the franchisor, evaluate the franchise agreement in depth, and get a full picture of expected costs and revenue. Before evaluating any franchise opportunity, it’s critical to understand the franchisor’s history and performance. Established brands are often the most reliable options, as franchises with reputations for stability and growth are more likely to succeed in the long run. It’s also important to consider the type of product or service, as some industries are known to be inherently riskier to invest in.

Once you’ve taken the time to assess the franchisor, it’s time to move to the franchise agreement. This document outlines the details of the franchise relationship and should be reviewed carefully for all of its agreements and wording. It’s essential to work with an attorney specializing in franchise law to ensure that the contract is in your best interest and to make it legally binding. Lastly, it’s imperative to consider the projected costs and revenues associated with the franchise opportunity. If your goals and budget don’t align with the estimated numbers, the franchise may not be a good fit.

Is it best to start a franchise on my own or partner with someone?

Whether you should start a franchise on your own or partner with someone largely depends on the opportunity and individual circumstance. Starting a business on your own may be ideal for those with enough capital to launch their business without outside help. Partnering with someone on the other hand, may be ideal for those without the necessary capital or skillsets to embark on the venture on their own. It’s important to identify a partner with complimentary skillsets, personalities, and expectations. When partnering with someone, it’s also important to use a partnership agreement which outlines rights, duties, and obligations of each partner.

How can I find a franchise opportunity that’s a good fit for me?

It’s essential to consider your individual goals and preferences when selecting a franchise opportunity. What type of product or service have you enjoyed working with throughout your career? Which industries have you seen success in? What is your budget? Are you looking to open your business full-time or part-time? Thoroughly research potential franchise opportunities and discuss them with the franchisor and other franchisees in order to get a full and realistic picture of the opportunity. Since the IFPG is a membership-based franchise consulting network with more than 1,300 franchisors, franchise consultants and vendor members, you may also take advantage of their knowledge and resources to assist you in the process.

Is it possible to invest in multiple franchises?

Yes, it is possible to invest in multiple franchises as long as you abide by the franchise agreement for each franchise. That said, it’s important note that it can be difficult to manage multiple businesses at once. Multi-unit franchises are often a better option for those looking to own more than one franchise. With multi-unit franchises, franchise owners have the option to own multiple outlets of the same franchise. This allows owners to benefit from centralized purchasing power and marketing while still having the option to engage and inspire multiple staff members at each location.

Topics:

Franchises,

Corporate Layoffs,

Business Owners

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