There's lots to learn before you make the leap into this unique form of self-employment.
The pros and cons of franchises
Franchises provide those
with limited cash to open a business, but it's not entirely a free ride.
You'll have to stick closely to the system laid out by the franchiser, who has the ultimate say on how you run your business and make a profit, or the specific ways you hire and train employees. If you are new to running a company, this can be a plus. If you value your independence, then franchising may not be for you.
Meanwhile, insider tips on opening a franchise usually include advice on how to choose one that will provide the support you need. On the upside, when you partner with a nationwide brand, you'll already have access to a well known name. You'll also have an advertising budget that most small business owners can only envy.
In addition, many of the big franchises can also forecast whether your business will be able to attract enough customers, or help you choose a location that will avoid direct competition from similar shops in the same area.
On the downside, an ineptly run franchise operation may cost you a lot in start up costs, and then leave you high and dry once the investment is made. In the end, you may also run the risk of getting hurt (even if you personally run a first-rate operation) by bad branding from other franchisees, or the parent company itself.
Opening a franchise? Do your homework
The bottom line is that a franchise can either be the perfect business opportunity, or a small business owner's worst nightmare. Do your homework, talk to other franchise owners, and research the past, present and future projections of the company you plan to invest in. Remember that anything that sounds too good to be true, usually is.
If you've sorted through the sales talk, and still think that you've found the perfect business, get a good lawyer
or other advisor to check the paper work and point out the aspects you may have overlooked.
If it's a good deal, and you have the money and business sense to make it work, you may have found
the perfect answer to owing your own business.
On the Web, learn whether or not you may be cut out for the franchise game - with discussions on promise and pitfalls, pros & cons, major companies to contract with, contract negotiating, and the jargon & buzzwords of franchising ...
- Here's another major information hub with story articles plus information on featured franchises from big name
companies you'll recognize, together with a searchable directory of franchise
opportunities. Browse around the left-hand menu for more resources, free newsletter,
Franchise Association - Find a clearinghouse of information on more than 1,000 opportunities plus guides to minority franchising, advice & how to's for finding the right franchise, online forum, suggested reading, and related resources.
Franchise Times - Check out their annual Top 200 list of choice franchises in the U.S. along with feature cover story and more with paid subscription.
Franchise World - Online UK magazine with guides for beginners on the pros and cons, buying tips, a glossary of industry jargon & buzz words, franchise classifieds.
Franchise Direct - International listings of franchise opportunities to choose from with basic information on startup costs and franchise fees. The articles provide good advice and industry and news gets you started on the research...