While there are many great reasons to buy a franchise instead of starting an independent business, not everyone is cut out to be a franchisee.
With most franchises, you purchase the entire system for operating the business, as well as the products or services and the rights to use the brand name. It’s a good choice for those who want to own a business but would like help getting it off the ground and managing it. People who like doing things their own way might not take to franchising, since franchisees are expected to closely follow the established model.
In order to operate a franchise successfully, you need experience managing people and finances. Having transferable skills for the industry you’re going into is also important.
Think about how much time you are willing to commit to starting and running a franchise. Although some franchises offer a good work-life balance, others require long hours.
If you want to buy a franchise, you should be willing to spend a lot of time and energy on due diligence. Research the franchise and your local market. Find out what kind of support the franchisor offers to new owners. Speak to lawyers, bankers and accountants to understand what you’re getting into. Learn about the federal and state laws regarding franchise agreements and disclosure documents.
You’ll also need substantial financial resources. The initial investment for a franchise can vary widely, from tens of thousands to millions. Remember to factor franchise fees, inventory costs and working capital into your estimates. If you need to finance the purchase, bankers will expect you to present a detailed business plan supported by data and market research.
To find out whether you are right for a particular franchise, get to know the people involved with it and ask a lot of questions. Take the time to meet the franchise team who will be supporting you. Ideally, spend a day with a franchisee to understand the day-to-day routine.
If you think you might be the right fit for a Dale Carnegie Training franchise, learn more here.