If you want to go into business for yourself, buying a franchise is one of the least risky ways to do so. You'll be starting out with a business model already established, already has a customer following, and is successful enough to offer franchises in the first place. In other words, you'll have many of the benefits of owning a small business with few of the inherent drawbacks of a startup. However, that doesn't mean you should jump into a franchise deal without careful consideration. Here are a few of the things you need to do before you commit yourself to a particular franchise.
Consult an Accountant
Just because a franchise is less of a financial risk doesn't mean there's no risk at all. Even a well-established business can go through a bad patch or not work well in a specific location. Before you take that risk, you need to understand the true size of it, and an accountant can help to give you a clear picture.
You need to talk with the accountant about more than just the money it will cost to purchase the franchise, rent or buy a location, and get started. Other factors to consider include the operational costs of running the business, and the tax burden you'll face as a franchise owner. Tax laws surrounding franchises can be complex, so be sure you know exactly what you're taking on.
Consider Potential Locations
Opening up a franchise close to home may sound ideal for you, but there's more to consider. Is there property available? Is there a market in your local area for the franchise you're considering? Does the franchise already exist in the area you want to open in? How about competitors? Consider you may have to open in a location that's further afield than you might like because it's what's best for the particular franchise you're considering.
You should also ask the franchisor if they offer protected territory. Protected territory means another franchise owner won't be allowed to open within a certain number of miles from the location you're going to be opening in. That's important if you decide to go ahead with your franchise purchase, because having a protected territory can reduce your risks of dealing with a damaging competitor.
Meet With Other Franchisees
One of the best ways to get an idea of what to expect as a franchise owner is to talk to other owners of the same franchise. You'll get the clearest insight into the day-to-day workings of the business by talking to others who are experiencing those day-to-day workings. Don't just talk to one or two other franchisees; make appointments with a sizeable number of them and get the full story, both positive and negative.
Having a list of the important questions you need the franchisees to answer for you can help these meeting go smoothly. You'll want to find out about the training they received before opening and the support they received from the company, both at the beginning and on an ongoing basis. You should also ask about their earnings, how the franchisor collects their part of the earnings, what kind of purchasing power the franchisees have, and what the relationships are like between the franchisee and franchisor.
Pay attention to complaints, especially if you hear the same ones repeated over and over again – chances are good you'll have similar complaints. On the flip side, if other franchisees list mostly positive experiences, you can probably count on having those same experiences.
What all of these steps have in common is they'll prepare you for the realities of opening a franchise for yourself. If the financials don't scare you, if you can name a few good potential locations that will work for you, and if the stories of other franchisees inspire you, then you're ready to take on the challenge of being a franchise owner yourself.
Check out sites like http://www.aladdindoorsfranchise.com for more information.