If you’re somewhat intimidated by the prospect of starting a new business from scratch, you might want to plunge into purchasing a franchise. This opportunity has the advantage of already having some degree of recognition, and you’ll also receive support, training, and even mentoring from the franchisor. Here are the most important things to do before purchasing a franchise.
Before Purchasing a Franchise
To give yourself the best chance for success, make sure to do these things before making a franchise purchase:
- Study the Field – understand your competition and your market
- Examine Your Personality – do you have the right temperament to operate a successful franchise?
- Check Your Finances – be sure you have enough money to cover startup costs and some early disappointment
- Consider Your Strengths and Weaknesses – know what you bring to the table, and what might trip you up
- Don’t Get Hoodwinked by the Franchise Lie – franchises do NOT fail at a 5% rate – they fail at a 66% rate, just like other businesses
- Avoid Franchise Consultants – a great many of these individuals simply prey on new owners, and establish their own lucrative businesses
- Talk to Other Franchisees – learn about the ups and downs before you ever even get involved
- Find Out All the Negative Aspects – investigate the cons associated with the franchise you’re thinking of buying into
- Review the Financial Disclosure Document closely – there are often some details included here that will surprise you, and cost you money
- Hire Professional Help – don’t be ashamed to reach out for professional assistance – it’s better than failing outright
- Do a Cost/Benefit Analysis – make sure that purchasing this franchise makes good business sense
- Earn Your Spurs by First Working in a Retail Outlet – many franchisors recommend that you first work in a retail setting to get a good understanding of business, before opening up your own.
Interested in Opening Up a Franchise?
If so, contact us about providing the capital for your new franchise. We frequently support franchise purchases because they have built-in recognition and branding, and that removes much of the pressure on a new startup.