Have you considered everything?
We cover franchise agreement terms, costs, research, location, build out, personal characteristics, conversations with spouses; literally everything you can think of, so there are no surprises.
Although it’s a lot to get through, ensure you have an answer for every one of the points to follow. Some of the answers you’ll know instantly, others might take some self-reflection and difficult conversations, but it’s important to have them. That way, when you get cold feet right before signing up for your franchise, you’ll know it’s just nerves and not an unanswered question causing that nagging feeling of uncertainty.
Similarly, you won’t invest your hard-earned cash in the wrong investment for you. The number one item of advice existing franchisees give to prospective franchisees is that you should do your research, and then do some more. Let’s get started.
Related: No Run of the Mill Franchise
- Have you, your spouse and knowledgeable family members discussed the idea of buying a franchise? Are you in complete agreement?
- Do you have the financial resources required to buy a franchise? If not, where are you going to get the capital?
- Are you and your spouse ready to make the necessary sacrifices in terms of money and time to operate a franchise?
- Will the possible loss of company benefits, including retirement plans and medical aid, be outweighed by the potential monetary and personal rewards that would come from owning a franchise?
- Have you prepared a thorough balance sheet of your assets and liabilities, as well as liquid cash resources?
- Will your savings provide you with a cushion for at least one year after you have paid for the franchise, allowing a year to break even?
- Do you have additional sources of financing, including friends or relatives who might be able to loan you money in the event that your initial financing proves inadequate?
- Do you realise that most new businesses, including franchises, generally do not break even for at least one year after opening?
- Will one of you remain employed at your current occupation while the franchise is in its initial, pre-profit stage?
- Are you and your spouse equipped to handle the emotional and physical strain caused by long hours and tedious administrative chores when operating a franchise?
- Will your family members, particularly small children, suffer from your absence for several years while you build up your business?
- Are you prepared to give up some independence of action in exchange for the advantages the franchise offers you?
- Have you really examined the type of franchise or business you desire and truthfully concluded that you would enjoy running it for several years or until retirement?
- Have you and your spouse had recent medical examinations? Is the present state of your health and that of your spouse good?
- Do you and your spouse enjoy working with others?
- Do you have the ability and experience to work smoothly and profitably with your franchisor, your employees and your customers?
- Have you asked your friends and relatives for their candid opinions about your emotional, mental and physical health and its suitability to running a business?
- Do you have a capable, willing heir to take over the business if you become disabled, ill or die unexpectedly?
- If the franchise is not near your present home, do you realise that it would not be beneficial to sell your home and buy one closer until the new venture is successful?
Related: Start With the End in Mind
- Do you and your spouse have past experience in business that will qualify you for the particular type of franchise you desire?
- Is it possible for either you or your spouse to become employed in the type of business you seek to buy before any purchase?
- Have you conducted independent research on the industry you are contemplating entering?
- If you have made your choice of franchises, have you researched the background and experience of your prospective franchisor?
- Have you determined whether the product or service you propose to sell has a market in your prospective territory at the prices you will have to charge?
- What will the market for your product or service be like five years from now?
- What competition exists in your prospective territory already from franchised and non-franchised businesses?
- Do you know an experienced, business-oriented franchise attorney who can evaluate the franchise contract you are considering?
- Do you know an experienced, business-minded accountant?
- Have you prepared a business plan for the franchise of your choice?