Thinking of buying a franchise? You probably have a million and one questions floating around in your head. Perhaps you’re wondering about the costs associated with buying a franchise. Maybe you’re questioning if it’s the right career move for you. Or maybe, you’re incredibly excited at the prospect of becoming your own boss but want to know a little bit more about buying a franchise before you take the leap. Good news, you’re at the right place. This article will cover some of the most important things you’ll need to know before buying a franchise so you feel confident about your choice.
1. Consider the market trends and business health
Nobody wants to invest in a franchise that isn’t profitable, so it might seem unnecessary to mention this, but make sure you thoroughly check the financials of the franchise you’re looking at buying. It isn’t always easy to determine if the franchise is profitable from a first glance. It is important you understand and assess the future of the industry, its opportunities for growth and any technological developments that may change or disrupt the industry. While you’re assessing the business health of the franchise, it’s also a good idea to look at the market trends of the industry and see how it’s changed over time and how it might change in the future.
2. What are the costs of buying this franchise?
It is vital you do your due diligence and fully understand your up-front investment and the ongoing costs. You should also look at the expected return on investment and the kind of marketing and training support you will receive at the start, and on a regular basis. Other costs you’ll want to consider include things like legal, accounting, rent, utilities and liability insurance.
3. Is the lifestyle of a franchise owner right for you?
As a franchise owner, you are generally in charge and involved in almost all aspects of the business. In any given week, you may find yourself involved with; marketing, social media, finance, sales, HR and operations. While the franchisor should help with some of these aspects, it’s mostly up to you to keep all parts of the business afloat (after all, it’s your business), so it’s important you feel comfortable with the idea you will be wearing a lot of hats as the business owner.
4. How will the franchisor support you and your franchise?
Before buying a franchise, you’ll want to ask the franchisor about the support they offer their franchisees. While some franchisors offer marketing, social media, sales and tech support, others may offer just the basics. Some franchisors take a hands-on approach, while others are happy to take a back seat and let their franchisees be a little more independent. Neither approach is right or wrong, it just depends on how much support you personally would like. That’s why you should always ask the franchisor about their approach, and how they support their franchisees.
5. Make sure it’s the right fit
As an entrepreneur, you want to invest in a financially sound business. While of course there is nothing wrong with this, it’s also important you don’t lose sight of why you’re going into business for yourself in the first place. One of the reasons many people invest in a franchise is to make money doing something they enjoy and are passionate about. While it is important to consider the financial viability of the franchise you’re looking at buying, you need to also remember to look beyond the figures. To be a successful franchise owner, it’s vital you have a real interest in the industry and will enjoy the various tasks and responsibilities that come with being a business owner.
6. Always ask for professional advice
It’s important to seek the professional advice of a solicitor and accountant before buying a franchise. Solicitors who are experienced in contract law can offer you advice on the legal side of buying a franchise, while an accountant can sift through the financials of the franchise to ensure it’s a worthwhile investment. Yes, seeking professional advice is an added expense, but it can often save you even greater expenses in the long-run.
The next steps
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