Are you thinking about buying a franchise? For female entrepreneurs, buying a franchise is a great way to become a business owner, but knowing how to research the many available options can be daunting.
Below are some steps to take on how to research a franchise opportunity and questions to ask before investing. As seen in the recent post, Women in Business: Is Franchising in Your Future?, franchising has many advantages. Making an informed choice helps entrepreneurs to choose the right opportunity.
Ways to Research Franchise Opportunities
Here are a few ways to start the process of investigating various franchise opportunities.
- Internet. It may seem obvious but there are many good resources, ratings, reviews, and details available about different franchise opportunities available online. Many franchisors have pages specifically aimed at potential franchise owners to provide details and answer questions.
- Franchise Expos. You will get lots of information and swag by attending a franchise expo that features hundreds of potential opportunities. It is a good way to hear the sales pitch and learn what brands expect. You will make some contacts and get lots of information.
- Fellow Owners. It is likely that many local locations of familiar brands are owned by people like you. Consider reaching out to local franchise owners to get the skinny on the process of buying a franchise and lessons that can be learned from others’ experiences.
- Business Brokers. A business broker helps you buy and sell businesses. Through their network, they have access to resources, providing you with valuable guidance and advice that helps in the process of identifying the right brand that meets your skill set, passion and financial objectives or goals.
- Business Organizations. Local and regional chambers of commerce, small-business meetups, and other organizations are a great resource to find information, support, and community. Be sure to tap into these resources, many of which are free or inexpensive.
Key Questions to Ask
When you begin to meet with franchisors about a potential purchase, be sure to have a prepared list of questions that can help you better understand your options.
An Entrepreneur article suggests that the most important question to ask is this: what is your number-one focus? The desired answer should be: the success of our franchise owners.
Here are a few other good questions to consider. Remember, you are interviewing them about investing in their brand.
- How will your company support me financially and with marketing, branding, training, and access to vendors?
- What is the complete list of expenses and fees, including up-front costs, royalties, monthly marketing or advertising contributions or mandatory participation in promotions?
- How does your company make its money from franchising?
- How will the location of my franchise be determined?
- What role has technology played in evolving your business model?
- What is the company’s exit strategy for franchise owners?
- Why do some of your franchisees get into trouble? What are the major pressure points?
- What ongoing counsel and strategic advising is available?
- How are conflicts between franchises and your company resolved?
How to Get Financial Support
Funding a franchise can be a stressful process of applications, pitches, and denials. Benetrends offers a different option. Using our pioneering funding strategy, you can finance your franchise purchase using existing 401(k) funds. To learn more about how Benetrends can help you with your new business, read first-hand accounts from current Benetrends clients.