Buying a franchise is becoming an increasingly attractive career opportunity. The shutdown gave people time to re-evaluate their career paths, many choosing the path of entrepreneurship. Work-life balance paired with the ability to work for yourself is driving more people away from the corporate 8-5. Buying a Franchise offers an easier way to begin your own business. Franchises already have a customer base who know the brand, established operating procedures, and marketing plans, and training. If you are thinking about buying a franchise in the near future, here are 5 tips to consider.
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When Buying a Franchise, Know How to Follow Instructions
When a Franchisor is validating a potential buyer, they want to ensure the buyer is able to follow instructions. Franchisees need to be able to follow the corporate framework. If you’re a person who likes to work outside of the box, coming up with new ideas or utilizing your creativity to solve issues, buying a franchise may not be for you. Franchisors want to know their franchisees will do what is expected and follow the established processes and procedures to ensure the experience is uniform across the company and brand. If you’re interested in purchasing a franchise, make sure you are engaged through the entire sales process. Follow the Franchisor instructions closely, and present yourself as someone who can be trusted to follow the rules.
Before Buying a Franchise, Talk to Other Franchisees
Buying a franchise is a significant investment. You’ll want to set yourself up for success by ensuring the Franchise you’ve chosen is a good fit. Speak with other Franchisees to learn more about their experience with the Franchisor. Are they successful? What challenges do they face? What is their relationship like with the Franchisor? Use other Franchisees as guides, so that you know what to expect and identify solutions to possible future challenges to remain proactive.
Know Your Location
Before you begin the buying process, you’ll need to have a solid business plan in place. An important part of this plan is knowing your location. In some cases, having your location selected is required before you can secure financing. Consider the area and the accessibility. Is there decent foot traffic? Is it easy to get to? Are there competing brands close by? Will you buy or rent? Your location is key to the success of your franchise. If it’s hard to find, chances are business will be slow. If there is a competitor across the street, this may work as a disadvantage. Work with the Franchisor to determine which locations have the potential for the most success.
Have Financing Ready
You can’t begin discussing the purchase of a franchise without knowing how you plan on paying for it. How much upfront capital will you need to purchase the rights to the franchise? What about the equipment and staff needed to open? The cost of the location?
You can pull a business or SBA loan, or establish a line of credit to come up with the needed financing. Some Franchisors offer financing for their Franchisees. If you have good credit, can show that you have a history of paying off debts, and enough collateral, securing financing for buying a franchise should be relatively easy. Franchisors want you on their team to help grow the business and raise capital. They want you to buy their franchise. Work with the Franchisor or the Development team to identify the best approach.
Running a Successful Operation
While buying a Franchise is an attractive thought for those who want to own their own business, there’s a lot of planning and time-investment around operating a successful franchise. In fact, buying the franchise will be the easiest decision you make as a Franchise owner. Once you’ve opened, you have to manage staff and operational processes like Accounting and Payroll. If you’re working with a team of investors, you’ll need robust reporting, KPI’s, and reliable data to show performance. Before you jump into buying a franchise, consider your strengths and where you’ll want to spend your time, and be prepared to delegate the tasks that don’t fall under your strengths, or don’t directly affect your goals as a Franchise Owner.