Choosing A Franchise Business

Once you've determined that buying a franchise is the right choice for you, your next decision will be to decide exactly which service or product you want to invest in.

And this decision had be harder than it seems. One of the biggest decisions a would-be entrepreneur has to make is choosing the right franchise system for them. After all, owning and operating a business is a large commitment–-in time, money, and energy-–and nobody wants to be stuck running a business that they don’t like, or that’s not the right fit for them. Someone who doesn’t like cars, for example, might not be happy running an automotive tune and lube franchise.

With a multitude of franchise opportunities out there, how does an entrepreneur choose among them? One good place to start is by taking stock of what you really enjoy doing, and what you want out of your business (and your life). Write down a list of your interests, passions, and desires. What are your hobbies? What do you enjoy doing in your spare time? What kind of jobs have you done in the past? What type of franchise business could you get excited about?

With any luck, you’ll be owning your new franchise for a long, long time, so it’s important to find something that you could enjoy and become passionate about. Many people, for example, have turned a favorite hobby or pursuit into a successful business enterprise. Still others have retired or left jobs they disliked to pursue their passions in a franchise business opportunity.

Many others have turned to their current careers when choosing a franchise. If you've worked in a particular area for many years, you no doubt have a valuable well of knowledge and experience to draw from. What better way to use that experience that in your own business? After all, who hasn't had the feeling that they could "run things a lot better" at their workplace, if only given the chance?

Some additional things to consider when choosing a franchise:

Demand for this product or service
Competition for this product or service
Name recognition of the franchise
Your ability to understand and operate this type of business
Your potential earnings
Training and support offered by the franchisor
Growth potential

Another important consideration (for most people, anyway) is the cost of a franchise. You can count on a significant initial investment, and then you'll need additional capitol for real estate, buying the required equipment, ongoing royalty fees (for up to 10 years), advertising expenses, and other costs.

Before investing in any franchise system, be sure to get a copy of the franchisor's disclosure document. Sometimes this document is called a Franchise Offering Circular. Under the FTC's Franchise Rule, you must receive the document at least 10 business days before you are asked to sign any contract or pay any money to the franchisor. You should read the entire disclosure document. Make sure you understand all of the provisions.

Also, make sure you consult your family before making this important decision. Being the owner can mean long hours at the office, plus the unexpected emergencies that can crop up from time to time, and you'll want to make sure that everyone in your family is on-board and supportive of your decision.

And lastly, seek out the advice of a good franchise attorney before making any commitments. An attorney can point out any potential legal problems you may encounter, and help you analyze the opportunity from an objective and unbiased point of view.