Is a franchise right for me?

Opening a business at any time can be scary. There’s always some risk involved, especially when you’re launching something from scratch. People turn to franchising to mitigate that risk. With a proven system and support, there is a greater chance for success. In fact, right now, people are flocking to franchising for that very reason. If you are asking yourself if you should invest in a franchise despite the pandemic, the answer may be there has never been a better time!  Lending is cheap, landlords are willing to make deals, and the job market is terrible. But, before you jump into anything, you need to make sure a franchise is right fit. 

Here are some questions that can help you determine if you are making the right choice

1. Are you willing to manage a business and do what it takes to succeed?
   Buying a franchise does mean you will have a proven system to follow and you will be given training and mentorship.  However, to be successful you are still required to do the work to build and manage your business. This likely means long hours well beyond the 40-hour work week, especially in the early days.  As a business owner, you need to be willing to “empty the trash and mop the floors” as well as hire and fire employees and sometimes deal with unhappy customers.
2. Do you like the franchise and can see yourself doing this for 10-15 years?
   Choosing the franchise to invest in should be about more than finding the one to make the most money.  If you are an active owner, it is important to choose something you will enjoy doing for the long run.

3. Are you willing to follow the franchise system?
   The key to franchising success is consistency of the product and service a customer will experience regardless of location. There must be a commitment to following the franchise system when you display the name and logo of the franchisor. If you are a true entrepreneur and are passionate about creating something new or always want to change the system, you may want to reconsider buying a franchise.
4. Can you afford the franchise?
   As with most businesses, a main reason for failure is under capitalization. A good franchisor will help you understand what you need to invest to get the business off the ground. There are no guarantees of how quickly you will start making enough money to support yourself and your company. Depending on the franchise, it can take several months or more to start generating income. A good rule of thumb is to have 6 months of working capital in reserve when you start.
5. Does the franchise have a successful track record?
   It is important to understand the profitability of the other franchisees. Does the franchise have an Item 19 in their franchise disclosure document with earnings information? If not, make sure you ask other franchisees about their earnings during the discovery phase. If this is a start-up franchise, you may have an opportunity to get in on the ground floor but, it may mean you will not be able to fully assess the earnings you can expect, and you may be helping the franchisor fine-tune their system.
6. Are other franchisees happy and successful?
   The franchise disclosure document gives you contact information for the other franchisees. Do not overlook the importance of having frank conversations with your peers. Question them about the training they received before and after opening their doors. How is the follow up and continued support from the franchisor? Is the system sound? Are they profitable? Most importantly, would they buy the franchise again? Ask for advice.
7. Do you fit in with the franchise culture and like the franchisor’s staff?
   Most franchisors have a 6-8 step process, that can take 3-6 months, before awarding a franchise. This is to give both sides an opportunity to get to know each other to make sure it is a good fit. Pay attention to how well you fit with the franchisor team, franchise director, franchisees, and support staff. If you have any reservations during this “dating period” it may be a red flag that this is not the long-term relationship you are looking for.
8. Do you have a personal support system?
   Starting and managing a franchise is a big commitment of time and money. Having the support and understanding of family and friends is extremely helpful to achieving success.

Buying a franchise is like buying any business. You must do your due diligence and investigate the franchise fully to know if it is the right choice for you. However, if you are comfortable with the answers you find to these questions, and select the right franchise, being a franchisee can indeed be the fast track to success and work fulfillment.