If you’re looking for an investment that has the potential to make you a nice amount of money, have you ever considered buying a franchise? By doing so, not only will you establish yourself with a solidified brand and receive great training tools to make your franchise a success, but in many cases, the franchisee will also assist you in securing financing, a work space and sometimes, they will even become an investor in order to further insure your success.
Of course, in order to make sure that you end up with a solidified franchise, there are some things that you should strongly consider first. That’s why we wanted to provide you with a list of five things that you should take into consideration when researching a franchise below:
Is there a consumer demand in your area? Whether you are opening up your own business or you’re planning to invest in a franchise, something that you definitely need to think about is the demand for that particular kind of product or service in your area. So, when it comes to a popular franchise, look to see if there already is one in your 15-mile radius. Also, be sure to investigate the kind of competition you might have as well.
What is the franchisor’s track record? If there is a particular franchise that you are strongly considering investing in, it’s important that you also do some extensive research on the franchisor’s track record. By this we mean that you should investigate their overall reputation, you should contact your local Better Business Bureau, you should inquire about the franchise’s infrastructure, you should see if they have any legal issues or outstanding judgments and you should also speak with some of their other franchisees to get a feel for what it’s like to partner up with that particular franchisor.
Is the franchisor financially stable? Being that you’re preparing yourself to make such a big investment (oftentimes one that costs well into the several thousands), you should look into the franchisor’s level of financial stability. So, before signing anything, request a copy of some of their financial records so that your lawyer and/or accountant can thoroughly review them.
Does the franchisor market the business well? Anyone who runs a business will tell you that while having a great product and/or service is essential, it’s not going to matter much if you don’t have a solid marketing plan in place. That’s because the only way to make your company thrive is if you have plenty of customers making purchases. For this reason, you also should look into how solid the franchisor’s brand is and the amount of effort they put into marketing their business. You need to invest in a company that definitely has a strong promotion plan.
Who is the franchisor looking for? If you were to read Franchising USA Magazine on topics like finding a solid franchise and franchise financing, one of the things that we’re sure they would recommend before you invest in a franchise is that you ask the franchisor what they are looking for in a franchisee. This will give you a good idea about if the two of you are a good fit. Plus, it will give you a clue about how much financial support they may be willing to offer in order to make your franchise a success. For more information on running a franchise business, visit Entrepreneur and put “running a franchise business” in the search field.