Are you intrigued by the idea of buying a franchise business?
You might think it sounds like a good idea for you, but how do you know if it’s right for you?
Whether it’s fast food, an oil change business, or a flower delivery company, the franchise model comes with a lot of up-sides. You should know, though — these types of businesses aren’t right for everyone.
If you’re considering buying a franchise, you must weigh the costs and benefits of the potential opportunities at their disposal. Does it makes sense to buy a franchise in lieu of starting a business?
It wasn’t right for me and I’m glad I figured that out before investing time, money and life into buying a franchise.
Ask yourself these 5 questions to decide if buying a franchise is right for you…
#1 – Do You Possess Keen Management Skills?
Franchises don’t test your ability to come up with new and innovative ideas. They do, however, test your ability to execute already tested business ideas.
Much of being a good franchisee is learning how to do the rigid, everyday nuts-and-bolts aspects of running a business. You have to be good at managing costs and operating on sometimes small margins.
Successful franchisees possess excellent interpersonal skills which allow them to:
- Effectively interact with their employees and customers.
- Use these skills to create loyalty, value and trust.
If you have this skill set, then you might be able to make great money as a franchise owner.
#2 – Do You Have Strong Ties In The Community Where You’re Buying?
What makes or breaks a franchise owner is often the ability to leverage local ties. People will come out and support your franchise if they believe you are investing in the community.
Many owners get out and participate in local fundraising or community events.
Here are some simple ways to get involved in your local community:
- Join the Chamber of Commerce
- Sponsor a local sports team or youth organization
- Join a local networking organization
- Advertise in the sports’ programs
- Support a charitable event
- Attend local parades and events
By becoming involved in the community and being visible at community events, you create the opportunity to take your product or service to the people.
If you’re more of a behind-the-scenes (or behind the laptop and closed doors) person, buying a franchise might not be for you.
#3 – Do You Have The Time To Invest In Your Franchise?
One of the reasons franchises fail is that franchisees try to own too many. They spread themselves too thin, and before they know it, their stores are offering poor products and service.
People think focus means saying yes to the thing you’ve got to focus on. But that’s not what it means at all. It means saying no to the hundred other good ideas that there are. You have to pick carefully. Source
If you have the time to invest in your individual store, then you can likely make it work.
The best franchisees are those who can put in the personal time and elbow grease to make their locations success.
#4 – Do You Have A Passion For A Certain Product Or Business Model?
Do you love the fact that Chick-fil-A closes on Sundays? Do you appreciate the culture of leadership cultivated at McDonald’s? Maybe you have a passion for making people look and feel great, as Massage Envy does.
The best franchisees are people who love what they’re doing.
How do you figure out what you’re passionate about?
Try these tricks:
- Revisit your childhood — what did you love to do as a child?
- Make a creativity collage to see where your mind takes you.
- Make a list of people who are where you want to be.
If a franchise truly speaks to your interests and passions, you’ll be better able to sell it to the customers in your community.
#5 – Are You Able To Get Financing?
Buying a franchise is expensive. The starting costs can be as much as $1 million in some cases.
For the average franchise, you’ll pay at least a few hundred thousand dollars for the land, equipment, building, training, and the right to use the franchise’s brand.
If you’re still building wealth, then it may be better to grow a business from the ground up.
Franchises are designed for people who can afford to pay more money for less risk.
The Small Business Association (SBA) has resources to help you to determine if you can actually afford buying a franchise.
Buying a franchise is a dream for some — especially if there’s a restaurant or business you’ve always loved. It can be rewarding, and it can be a great path to short-term income and long-term wealth.
Just make sure you’re in the right position to make the move. Otherwise you may not love the outcome.
Have More Questions About Buying A Franchise?
- What Are The Best Franchises To Buy Into In 2016?
- 10 Steps To Buying The Right Franchise
- What Are Franchisers Looking For In Franchisees?
- How Much Does It Cost To Open Different Fast Food Chains?
- How To Weigh The Pros & Cons Of Buying A Franchise
I’m a health nut, a frugal mom, a dog lover, a DIYer, and a gadget girl. Personally, as a post-divorce, working single mom on a budget I have a lot of experiences that I enjoy sharing so others can learn from the things I wish I knew earlier! Professionally, I’ve worked full-time in a variety of marketing, sales, and editing jobs. You can always find me at the corner of Good News & Fun Times as Managing Editor at The Fun Times Guide (32 fun & helpful websites).
