So you’re inspired to start your own business, and not just any business, but a franchise model. Maybe through a colleague, or seeing an actual franchise concept in action, your entrepreneurial spirit got the best of you. Now you’re confident that 2021 is the year for you to leave your job and become your own boss. You’re absolutely itching to get started, but definitely not from scratch. After doing some online research yourself, you may have realized that the franchise business model is the safest and smartest way to start. “It’s all done for you — it’s a recipe for success.”
Is that true? Is getting a franchise a good way to start your own small business?
Well, yes and no. It all depends on the franchise, but having experts on your side like me will ease your mind and assist in making the process much easier. Let’s chat a little about what researching franchises will entail, to ensure that you find the best fit for you.
Firstly, the franchise model is very simple: A parent company (the franchisor) develops a model for a successful business and builds and advertises a brand. An individual (the franchisee) licenses that brand, products/services, and business model — typically with exclusivity for a specific geographic location.
Franchises work for those who:
- Want the security of choosing a brand-name business with a proven track record.
- Want a “turnkey” operation with established business operations and guidelines, training and support in the beginning and ongoing.
- Are willing to stay within the rules. Most franchisors have specific guidelines on the products and services they sell, the suppliers they use, and the way they do business.
- Have money to invest up front which will include both a franchise fee and startup costs (including build-out, marketing, etc.)
- Are willing to spend a little to save a lot. You are likely to have monthly royalty and advertising fees. These fees help support the back-end infrastructure which is ultimately why you buy a franchise.
- Are committed to working hard. Just as with any business, running a franchise still takes a lot of work to succeed.
When you start to seriously review your options, you should/will:
- Find potential franchises and check out resources and guidance from www.IntegrityFranchiseGroup.com
- Receive and read through an “FDD” — Franchise Disclosure Document — from a franchise you’re seriously considering. The FDD is required by law and will detail many of the aspects of the contract you will eventually sign.
- Take the time to talk to other franchisees, whether current or past owners, of the company you’re considering.
- Get professional help and guidance — we provide all the franchise development services you will need including a franchise attorney and funding experts in your area.
Major red flags to look for when researching any franchise model:
- Does not have a business concept or a successful operation system that is proven.
- Has a history of conflict and litigation with its franchisees.
- Does not easily provide you with a list of current and former franchisees.
- Does not have a well-established or well-designed trademark or brand recognition.
- Provides minimal or no initial and ongoing training and support.
- Does little or no marketing/advertising.
- Does not give you territory exclusivity.
- Requires you to purchase supplies or services at inflated prices from them or their approved vendors.
Franchise ownership can indeed be a “recipe for success.” When looking to invest, always be sure you do your homework to find the right franchise, and make sure you’re the right fit for this business model. Surround yourself with knowledgeable people – like me – who can ease your concerns and help you distinguish your best fit. Most of all, trust the process!