In today’s industries there are vast array of franchise opportunities available for entrepreneurs. Buying into the right franchise opportunity can seem overwhelming to a new buyer. Doing thorough research before buying into the franchise will help you overcome the hurdles of investing in a new business.
An important issue to look at in buying into the right franchise are the varied costs involved in purchasing a franchise business. Have a clear idea of the amount you are able to initially invest, and how much money you are able to continue investing as your franchise business grows. Franchise fees for the initially investment can run from the tens of thousands of dollars up to hundreds of thousands of dollars or more. Other investment expenses to consider are costs to rent a pre-existing office, store, building or facility, or the investment of building a new structure. Other start-up costs to consider may include equipment for the business, initial inventory, operating licenses, insurance, and promotion fees.
When buying into a franchise business it is important to consider the skills, training and education you already possess. Some industries and businesses require training, licensing or certifications for their owners and employees. Examples of these types of businesses may include real estate agencies, auto repair, interior design or tax preparation. Focusing your search for a franchise business you already have a background in narrows down the possibilities. Investing in a business you already have knowledge of will also decrease the learning curve in owning a new business.
Having clearly defined goals for your franchise business will also help you with buying into the right franchise. Determine the industry and type of business you would like to work in. This will narrow down the selection. Deciding what business model you want, whether you want your franchise to be a sales oriented, or service type business will also make buying into the right franchise easier.
There are many ways to find the right franchise business opportunity. Looking into local franchise outlets in the industry or business you are interested in is great opportunity to check out a franchise business in operation. For example, lets say that you enjoy electronic cigarettes and vaping and go into those stores on a normal basis. A Electronic Cigarette Franchise, similar to Vapor Galleria Franchise, would be a great next step in your franchisee pursuits. Franchise expositions, franchise brokers, and franchise handbooks are other ways to find franchise business opportunities to buy.
The franchisor is required by regulations to provide you with the Franchise Disclosure Document for their business before you sign and documents or invest any money into their franchise business. The Franchise Disclosure Document is required to have 23 specific items that must include information about the franchise, the franchise’s offices and about other franchise owners. The Federal Trade Commission is the entity that enforces the rules in the Franchise Disclosure Document.
Buying into the right franchise for your business takes time and diligent research. Establishing the goals you have for your franchise, knowing what type of business you want to invest in, and what type of services you want to offer before investing any time or money will go far in helping you in buying into the right franchise business.
- Federal Trade Commission. “A Consumer’s Guide to Buying a Franchise.”
9 April 2016
- Federal Trade Commission.
9 April 2016