Franchising

So what exactly do you have to do to find the "right" franchise opportunity for you? Below are the 12 steps to franchise ownership that will help you to narrow down your search for your "ideal" franchise. These steps will give you an overview of the entire process and guide you through the stages of investigating a franchise opportunity.

Basic planning is essential when purchasing any franchise business. The ability to track your progress as you move forward will help you make a business decision as opposed to an emotional one. The selection process can be demanding, even exhausting. You might convince yourself the franchise that is the easiest to buy or the one suggested by a franchise consultant or broker is really the best one, and make a quick decision with the real possibility of being stuck with an unsuitable or even fraudulent franchise and ultimately regretting your decision.

The reality is that when done properly, the process of buying the right franchise will take anywhere from three to six months and may cost you several thousand dollars. While this may seem extreme given the sales hype myth that suggests you can be happily in business in as little as two weeks, the penalties for shortcutting the process are severe. There is a direct relationship between the effort you put into the process and the ultimate degree of success. Don't succumb to the emotional pressure to buy. Remember that while you may have to pay for good advice in time invested as well as real dollars, poor timing coupled with bad advice will ultimately cost you a lot more.

The 12 Step To Franchise Ownership:

1. Before contacting any franchisors, you should analyze your interests, abilities, strengths, and weak points, as well as your financial goals and limitations. You must be brutally honest with yourself!  
2. Take a good hard unemotional and objective look at the product or service you would be selling as a franchisee. Analyze the market for the product in your region and determine if you can find a viable location for the franchise in your local area.  
3. Determine which franchise programs might suit you best (based on your interest and self-analysis) and begin contacting the franchisors requesting for further information, such as brochures, DVD's, marketing and advertising materials, and a UFOC.  
4. After you receive the information you have requested, its time to narrow down your list of possibilities to no more than two or three companies, using a preliminary evaluation of the franchisors, their products and services, and their franchise programs. Be careful not to "fall in love" with any one franchise concept at this stage because you like the product or service or had a good experience with this franchise as a consumer.  
5. Check outside sources of information such as online publications including franchise blogs and forum, government agencies, consumer groups, etc.-for more background on the franchisors. Unfortunately, its often difficult to find negative information or litigation on specific franchises.  
6. Its time to contact the companies you've singled out and indicate your interest to them. Submit the preliminary franchise applications to establish yourself as a serious prospect.  
7. Request detailed information on the financial and legal particulars of owning one of their franchises, if you haven't already received it. Ask for a list of currently operating franchisees that you may speak with. Some franchisors will send you a UFOC with your initial request and others will wait until they receive your application to see if you qualify.  
8. You MUST consult with your accountant and a qualified franchise attorney to determine the feasibility of investing in the franchises in which you are interested. Check franchisors' earnings claims (if they make any) and prepare profit projections for your potential business. Do not skip this step!  
9. This is one of the most important step of all: Speak with some of the companies' current and former franchisees regarding their experiences with the franchisors. Learn all you can about the kinds of support the companies provide. Most people take the time to speak to a few franchisees - this is just not enough.  
10. Meet with the corporate staff of each of the companies you are considering. Ask any questions you might have, and give the company an opportunity to interview you. Now its time to make your decision. Again, don't skip this step. You want to meet with these people face to face.  
11. Have your accountant and franchise attorney review the UFOC and the franchise agreement that the franchisor has given you. Negotiate favorable terms, where possible, before you sign the contract.  
12. Final step before you commit: Whatever franchsise business you select, you want to go in and work as an employee. Take two weeks or even 30 days of your life and get in there and roll up your sleeves and learn about the day to day business of running this franchise. Then you will be really know if you like it and want to get into this business.

If you follow these 12 steps, you should be able to make a wise decision regarding your investment in a franchise. You probably won't find a franchise that is a "perfect" match, nor do you need to. You want to find a close match. Though franchise fraud has become relatively rare since the 1979 passage of a federal law that requires all franchisors to disclose certain basic facts to potential franchisees, you can never be too careful. Don't rely solely on the information the company gives you, and verify financial data and earnings claims whenever you can. And remember; Franchise owners can be a most valuable source of information. Keep in mind also that in 15 states, there are laws governing franchises.

Completing these 12 steps to franchise ownership will take some time. You should allow 2-3 months and it is important not to rush the process or pressure yourself because you may be out of work. Regardless of how attractive the franchise business appears, how great the products or services are, how enjoyable the customers seem, or how well you think you fit in, if the franchise opportunity will not deliver your desired results with a high degree of probability, it is the wrong franchise for you!

Part 2 of 5 from A Proven Method to Determine the Best Franchise For You