The Franchise Option, Business in a Box

article-franchise

If you’re thinking of starting a business to supplement your income or gain independence from corporate America, investing in a franchise business may be a good opportunity for you.

The franchise industry is growing with almost 800,000 franchise locations and more than 4,000 franchise brands now operate in the U.S.

According to FranData:

  1. More than 365 new franchise companies in 2015.
  2. Franchising produces more than 3% of the GNP and outperforms all other sectors on job creation.
  3. Franchising is healthier than it has been since the economic downturn.
  4. The future of franchising might not be with mega brands with thousands of locations – a small, regional franchise chain might work well with just 50 or 100 locations.

It’s important to do a thorough evaluation of the opportunity before you make a decision to jump in.

First, set a goal for what you want to get out of your business.  Are you looking to leave corporate America and do your own thing, or are you looking to run a side business?  What sort of financial goals do you have for the business?

Second: Consider the pros and cons in light of your goals:

Pros:

  • The business model is likely already proven in other markets, so you can have more confidence in going this direction vs. starting your own business.
  • You get to leverage a lot of the work that has already been done – such as brand recognition, business model, financial templates, etc.
  • The Franchise management team is keen to help you with day-to-day operational guidelines, location scouting, retail store design & merchandising, etc (of course at the price of your franchise fee).
  • Though you will be managing the business on your own, you have a network of other franchisees that you can mine to trade ideas & obtain mutually supportive relationships.

Cons:

  • You must ahere to the Franchisor’s requirements for the operation – and this includes operating hours, advertisements, service levels, menu items, etc.
  • Franchise fees, Royalties, and Advertising Fees may be high and, in many cases, are considered additional fixed costs.
  • Most importantly, understand the hours required as owner/manager and does the business plan deliver the ROI you seek.

 

What You Missed At the 2016 International Franchise Expo

 

10 Important questions to ask when considering Franchise business:

  1. Have you considered why a Franchise is the right business purchase?
  2. Would your involvement in the business be full or part time?
  3. Can you make financial commitments with cash flow franchise generates during initial start up phase?
  4. How will you finance the business? Do you have cash assets, plan a line of credit, use roll over 401K without penalty, apply for SBA loan?
  5. Are you an extrovert and enjoy connecting with people?
  6. What attracts you to owning your own business?
  7. What are your strengths and weaknesses relating to managing a business?
  8. How do you foresee your role on daily basis – do you see yourself as an owner manager (some franchisors require this).
  9. How would you rate the importance of status (what other people think) in the selection of a business?
  10. Types of franchise businesses that you know you would be interested in? Would not be interested in?

Set your goals on paper – be sure to include personal, time, financials, etc.

 

Here is a list of my personal goals as I set out to explore franchise ownership:

  1. Business ramp up quickly
  2. Increase college fund contributions
  3. Be my own boss
  4. Earn in excess of $100,000 in a year while working on my own clock
  5. To own and operate 3 centers within 10 years – one at beach location
  6. To have a business to hand down to my children
  7. To retire by age 62

Want more information on franchises? See the below resource links.

https://www.entrepreneur.com/franchise500

http://www.fbr50.com/franchisee-satisfaction-award-winners-2016/

http://www.forbes.com/best-worst-franchises-to-buy/#17dfb2141a03

http://www.franchisetimes.com

 

Next Phase Networks provides our members introductions to franchisors throughout the country.  Click here to join now.

0 Comments

Leave a reply

Follow Us

Log in with your credentials

or    

Forgot your details?

Create Account