Have You Ever Considered a Franchise?

Whether you're working a full-time job and looking for extra income, retired and in need of a project to pass the time, or excited by the possibility of being your own boss, a franchise opportunity may be the right decision for you. There are several factors to consider when exploring a franchising opportunity.

1. Financial Considerations

Financial aspects are some of the most important factors to explore when deciding whether a franchising opportunity is right for you. Find out the amount of the initial cash outlay that is required to enter into the franchise, and become familiar with the sales structure for commissions. Determine whether the franchiser offers any financial assistance; some franchisers provide loans at interest rates below the current market value to assist franchisees with start-up costs.

2. Equipment, Supplies and Systems

Inquire about the supplies, equipment and storefront fixtures that are needed to start the franchise. Find out whether the franchiser makes these items available and what costs are involved in acquiring necessary items. Ask whether a point-of-sale system is required, and find out what technology, including hardware and software, is involved with this system.

3. Franchise Reputation

An important consideration when choosing a franchise is the reputation of the company. Inquire about success and failure rates of other franchisees, and do some research to find out what consumers, vendors and manufacturers think of the franchise. If the company owner has an excellent reputation with the public, your franchise is likely to enjoy greater success.

4. Franchise Support

Figure out how much support you should expect from the franchiser. Research the top officers in the franchise, and learn about their reputations. Ask whether the company owners offers initial or ongoing training for you or your employees. Also, find out whether the franchiser has any reporting requirements for sales, and become familiar with any budgetary requirements or selling quotas that must be met. Ascertain whether the trademark owners makes periodic visits to your franchise location to assess the franchise plan and successful operation; some franchisers even provide rehabilitation plans and assistance for franchises that are suffering.

5. Franchise Management

Owning a franchise does not require you to man the storefront full time. Decide whether you want to hire a manager to oversee your shop and its employees. This allows you to manage the manager while maintaining time away from the franchise. If you plan to own several franchise locations, consider employing a general manager that oversees the managers at each store, so you have only one employee reporting directly to you.

While a franchise opportunity may provide income, stimulation and flexibility, it can also be a stressful venture. The decision to take on a franchise opportunity is not one to make lightly, and there are important factors to consider before delving into the endeavor. Take the time to explore these five aspects of the deal.

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