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.

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Franchise Directory Showcase

Precision Auto Care Franchise

Franchise Business Types:
Automotive Franchise, Oil Change Franchise, Repair Franchise, Brake Franchise, Muffler Franchise, Tune-up Franchise, Auto Care Franchise

Personal Training Institute Fitness Franchise

Franchise Business Types:
Fitness Franchise, New Franchise, Health Franchise, Health Club Franchise, Personal Training Franchise Womens Fitness Franchise, Ladies Fitness Franchise, Mens Fitness Franchise

New England Hot Dog Company Franchise

Franchise Business Types:
Restaurant Franchise, Food Franchise, Fast Food Franchise, Hot Dog Franchise, Ice Cream Franchise, New Franchise, Fastest Growing Franchise, New England Based Franchise, Fast Food Retail Franchise

Charley’s Grilled Subs Franchise

Franchise Business Types:
Restaurant Franchise, Food Franchise, Top Franchise, Entrepreneur Magazine Franchise 500, Fast Food Franchise, Steak Franchise, Sub Franchise, Sandwich Franchise, Chicken Franchise, Food Court Franchise

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Just What Should You Look For In A Franchise?

What is a Franchise?

- An authorization to sell a company's goods or services in a particular place
- A business established or operated under an authorization to sell or distribute a company's goods or services in a particular area.
Why franchise?

There are many reasons why franchising is the best type of operation for the majority of first-time business owners. Most revolve around the increased probability that the business will succeed and provide profits to the owner in a shorter time frame than an independent business. This allows the owner to address her or his personal goals both financially and personally. Here are a few, more detailed, answers to that question.

Earn what you’re worth

Thousands of franchise owners report they were handicapped in their corporate careers by company policies and supervisors that put a cap on their earnings. When you own your own company, your efforts are rewarded and your personal income shows it!

Satisfaction of Achievement

Many business owners report that seeing their actions turned into reality without stagnating for months in committee meetings (as often happens in big companies) is a major reward of owning their business.

Quicker Start-Up than Independents

A proven plan out-paces an independent’s hit & misses operation almost every time. Looking at just independents that succeed--you'll find that franchises grow quicker, reach break-even sooner and succeed more regularly than others in the same industry as depicted in the accompanying chart

What do I need to know?

Another question that arises is “What do I need to know in building my own franchise?” There are four main ingredients found in each business...

- The product or service that is delivered to its customers.
- The location that the business occupies.
- The amount of capital that was invested or borrowed by the venture.
- The management team that runs the company -You!

How did franchising start?

One of the earliest franchisors was the Singer Sewing Machine® Company, which set up dealers shortly after the Civil War to sell and repair its revolutionary machines throughout the country. Shortly after the turn of the century, Coca-Cola® licensed others to manufacture and distribute its wonderful elixir. Ford Motor Company® later set up dealers to sell and service its products. Of course, McDonald's® is an example of how an entrepreneur (Ray Kroc) could take an idea and quickly spread it coast to coast (and eventually around the world) without starting out with millions of dollars in capital. Many companies turn to franchising as a system for expansion because they recognize that they can grow rapidly with a minimum amount of capital and enlist top-notch partners if the company is willing to share the profits. The company that sells licenses to its system is called the franchisor, while those who open their own units are called franchisees.
Making a choice

Choosing the right franchise can be a confusing process.

First, you must believe in the product or service that the franchise network delivers. Is the niche stable, expanding, long-term, saturated?

Next, you must verify the industry's future. What do the trade papers predict?

Check your aptitude for the job. If you don't enjoy math, an accounting franchise isn't for you, etc. Often outside sources can help here. A personality and aptitude test (similar to those used by major corporations) will help you discover your hidden talents.

Determine the earnings capability. Most franchisors can't provide earnings projections, but you must make an effort to determine your future return.

Confirm the potential earnings and the franchisor's integrity with existing franchisees. Each franchisor will give you a list of its network members.

You should call them to get their confirmation of your projections. If a franchisor (or business opportunity seller) will not give you a list of its franchisees, you should heed the red flashing lights and end discussions.

While this article is just the tip of the iceberg, you can get a good idea why you should start your own franchise, today.

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