Starting a business often feels like an overwhelming endeavor, but becoming a franchisee offers advantages compared to other small business models. For many, the Franchise Model is attractive, because it allows them to own their own business, but still benefit from a renowned brand, existing systems and processes, and nationwide support. Families who want to spend more time together can benefit from this model, as many Franchisors offer lower-cost part-time or flexible schedules to make the business fit into their life more easily.
This FAQs Guide is designed to answer the most common questions prospective franchisees have about the process of becoming a franchisee. We’ll discuss how to research and evaluate franchise opportunities, decide if franchising is right for you, and take the right steps on the path to becoming a successful franchise owner. We’ll also list out some of the major pros and cons of franchising that franchisees should consider before making a decision.
Q: How do I select the right franchise for me?
A: Choosing the right franchise opportunity requires a good deal of research, due diligence, and, in some cases, professional advice. Start by creating a list of franchises that fit your interests, experience and financial objectives. Sometimes, you might be surprised to find some of the most successful businesses are those that you least expect them to be.
Once you have identified the franchises you’re interested in, take an in-depth look at each one, including the financials, the franchise terms, the local market conditions, and, most importantly, the Franchisor-Franchisee relationship. You may want to consult with a trusted franchise attorney and accountant to understand the details. As you assess the business opportunities, take into consideration potential expenses like start-up costs, ongoing royalties, advertising, and location.
Q: Do I need to have prior knowledge or experience in a particular field to start a franchise?
A: Not necessarily. Franchisees come from all kinds of backgrounds, each with different levels of knowledge and experience in business management. Many franchise opportunities offer a variety of resources and training to ensure that franchisees understand the business and are successful. Moreover, franchisors also require that prospective franchisees are able to finance the business and demonstrate the financial stability to operate the franchise.
Q: What are the advantages of choosing a franchise opportunity?
A: One of the main advantages of franchising is the ability to own and control your own business without having to “reinvent the wheel”. When you become a franchisee, you are provided with a proven model and a recognizable brand, enabling you to save a lot of time and money. As a bonus, the franchisor usually provides extensive training and ongoing support to help you succeed.
From an investor’s standpoint, franchises offer significantly higher success rates than other small businesses. Studies have also shown that franchised businesses typically have higher sales volumes than independent-owned businesses, making them more attractive options for potential investors.
Q: What are the disadvantages of franchising?
A: One of the biggest disadvantages of franchising is the cost. The initial-investment for a franchise can range from a few thousand to hundreds of thousands of dollars depending on the type and brand. You will also be required to pay an ongoing royalty to the franchisor in exchange for the use of their brand and systems. In addition, many franchisors impose restrictions on marketing and business operations that may discourage some prospective franchisees.
Q: How do I get started?
A: Before you dive into your research and start evaluating potential franchise opportunities, it’s important to do a self-assessment. Franchising is a significant investment of both time and money, and it is important to be sure that it is the right move for you. Consider the timeframe: own a franchise takes dedication, so assess whether you have the commitment and any possible business experience to run a successful operation.
Once you’ve established that franchising is the right fit for you, start researching the available opportunities and narrowing down your options to those that match your criteria. Make sure to ask plenty of questions, and reach out for help if you don’t understand something. As you explore different options, keep in mind your goals, abilities, preferences and lifestyle.
The IFPG network offers resources and guidance to help aspiring franchisees explore the process of finding the best franchise opportunity for them. Our wide range of members includes experts and experienced franchise brokers who can use their expertise to help you evaluate the options available to you.