how to find a good franchise

How to Find the Right Franchise

• 1. Define your goals Before beginning your search, sit down and think about what you want to get out of owning a franchise. ...
• 2. Do your research Try reaching out to franchise consultants and attending trade shows and conferences. ...
• 3. Talk to current and former franchisees ...
• 4. Consider the cost ...
• 5. Get advice from experts on the right franchise ...
• 6. Contact a professional franchise consultant ...

Full Answer

How to find the best franchise for You?

• Franchisees should look for a supportive franchisor.
• Because owning a franchise is a long-term commitment, be sure to pursue a business that interests you in the long run.
• Ask specific questions about processes, ongoing support and terms of the deal to help you make your decision.

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How to choose the right franchisees?

• Is there a demand for the product or service in the intended site location of your would-be franchise?
• How is the franchise’s competition? It’s more than likely that popular franchises may have existing branches near the site you plan to operate.
• Identify industries that are resistant to recession.

What do franchisors look for in a franchisee?

• He or she must have adequate reserves of working capital in case the business takes longer to grow than anticipated.
• A good credit record.
• Have an interest in finance and business issues.
• A positive attitude, all franchisors want good people representing their brand.

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How to find the right franchise for You?

What to look for when choosing a franchise

• A strong support system for franchisees. One of the biggest benefits of buying into a franchise is that the brand is already established. ...
• Investment in your potential. ...
• The franchisor’s professionalism. ...
• Mutual expectations. ...
• Sales and business approach. ...
• Online reviews. ...

What franchise is the most profitable to own?

Most Profitable FranchisesDunkin'7-Eleven.Planet Fitness.JAN-PRO.Taco Bell.Orangetheory Fitness.Great Clips.Mac Tools.More items...•

How do you decide if a franchise is right for you?

So, to determine if a franchise brand is a good match, ensure you mutually have trust, communication, realistic expectations and passion. Assessing these factors will lead a franchise owner on the path to positive experiences that reach both their personal and professional aspirations.

How do you choose a profitable franchise?

Franchise industry expert Joel Libava, 'The Franchise King', says profitable franchises have three things in common:They offer a superb product (or service).They have top-shelf marketing.They focus on making sure their franchisees are making money!

What are the 4 types of franchising?

The four types of franchise business you can invest inJob or operator franchise. These owner operator franchises are usually home based, which keeps overheads down to a minimum. ... Management franchise. ... Retail and fast food franchises. ... Investment franchise.

Am I guaranteed success if I buy a franchise?

Franchising is seen by many as a simple way to go into business for the first time. But franchising is no guarantee of success and the same principles of good management—such as informed decision-making, hard work, time management, having enough money and serving your customers well—still apply.

Is franchising a good idea?

If you're a fledgling entrepreneur or a seasoned business person wanting to diversify your holdings, you've probably wondered, “Are franchises a good investment?” The simple answer is yes, especially if a great opportunity presents itself. There is an obvious appeal to starting a business via buying a franchise.

Do franchisees make good money?

Buying a franchise might seem like easy money, but those royalties and fees will quickly cut into profit margins. The majority of franchise owners earn less than $50,000 per year.

How much do franchise owners make?

When researchers accounted for the inflations caused by the few top franchises, it was established that the average annual income of 51 percent of franchisees is less than 50,000 dollars. The study also found that only 7 percent of franchise owners earn over 250,000 dollars a year.

How much does a franchise cost?

Franchise startup costs can be as low as $10,000 or as high as $5 million, with the majority falling somewhere between $100,000 and $300,000. The price all depends on the industry, location and type of franchise.

How do I turn my small business into a franchise?

How to Franchise a BusinessMake sure your business is ready to franchise.Protect your business's intellectual property.Prepare a financial disclosure document (FDD)Draft a franchise agreement.Compile an operational manual for franchisees.File or register your FDD.Set a strategy to achieve your sales goals.

What is the most popular type of business for franchising?

Fast food and business service franchises are among the most common business-format franchises. Investment franchises: These franchises require franchisees to invest their own capital.

What business structure is best for a franchise?

S-Corporations These shareholders then report this information on their personal tax returns with a Form K-1. This is an ideal legal structure for franchisees because they will have a limited number of shareholders, and those shareholders assume the tax liability whether they receive any income from profits or not.

What are the rules of thumb for determining whether franchising is a good choice for a particular business?

Stable Environment: For growth of any business it is required to be in stable environment as often changing variables are not feasible for survival and growth of any business, so if business is in stable environment then only it should proceed towards franchising as an option for expansion.

What is the most important consideration in franchising business?

Important considerations for your franchise model include fee and royalty percentage, terms of agreement, size of territory awarded to each franchisee, geographic areas in which you are willing to offer franchises, the specifics of your training program, and more.

How would you research a franchise purchase before making the decision to invest?

Researching and understanding critical information such as industry trends, market size, franchisor reputation, the FDD, and costs of starting and running your business will help you better prepare to make an informed decision.

What could be the signs that a business is Franchisable?

Franchisable Business Definition: A business that has the potential to be sold as a franchise opportunity, generally having the following characteristics: It is established, offers a unique concept, is teachable and can provide an adequate return to potential franchisees.

Step 1: Set Your Criteria

Often, people let someone else choose their franchise for them. They get a particular opportunity recommended to them by a friend or colleague, or see an ad, or get approached by a salesperson, and after a quick investigation they put down their money and get started.

Step 2: Draw Up a Shortlist

When you’ve got a clear idea of what you’re looking for, it’s time to create a shortlist of actual franchises you’d be interested in researching further.

Step 3: Use Online Resources

Online franchise directories can give you a good overview of major franchises available in your chosen industry, and provide you with the data you need to start populating your shortlist.

Step 4: Check With Local Consultants and Brokers

Although you can do a lot of research without leaving your computer, it’s still worth going out and meeting people in your local area to find out about opportunities you may have missed.

Step 5: Compare and Refine

By following these steps, you should easily be able to create a shortlist of at least ten possible franchises. In fact, you’ll probably end up with a lot more. Your problem at this stage may not be finding enough suitable opportunities, but sorting through the mass of franchises you’ve found.

Next Steps

In this tutorial you’ve learned how to find good franchise opportunities, both online and in person. You’ve seen how important it is to start by defining your criteria, so that you’re clear about what you’re looking for and don’t get sucked into something that’s not suitable.

What to ask before buying a franchise?

Key takeaway: Before diving into a franchise opportunity, ask yourself specific questions about your goals, strengths, desired business area, how involved you want to be in daily operations and how much money you're willing to invest in the opportunity.

What is the best way to learn about franchising?

Similarly, attending franchising industry conferences, such as the International Franchise Association's annual conference, is a great way to identify and compare your options.

What is a franchise disclosure document, and why is it important?

A franchise disclosure document (FDD) details the 23 obligations a franchisor has to a franchisee. By law, this document must be provided to franchisees before any money is exchanged.

What is meaningful to a franchisee?

Although some franchises want their franchisees to have industry experience, what's meaningful to them is for a franchisee to have the basic business know-how and entrepreneurial drive to succeed.

How much does it cost to franchise a business?

Franchise costs vary greatly depending on the industry and specific business model. While some upfront fees are less than $10,000, others can be upward of $1 million. Terry Powell, founder and CEO of franchise business coaching company The Entrepreneur's Source, said prospective franchisees should weigh the initial investment against their expected return, along with their income, lifestyle, wealth and equity goals.

How to get a good sense of a franchisor?

Be on the lookout for information on message boards, Facebook or LinkedIn groups, or articles where franchisees talk about their experience with the franchisor. If reviews are consistent or positive for the most part, you can get a good sense of the company's business practices.

Why buy into a franchise?

One of the biggest benefits of buying into a franchise is that the brand is already established, so make sure the franchisor is available to guide you with efforts such as marketing.

How much does it cost to buy a franchise?

The initial investment in a franchise can be pricey, and range anywhere from a few thousand dollars to over a million. If you're looking to purchase a franchise at a lower price point, there are options for you in a variety of industries.

How much does a franchise cost?

Every franchiser requires an upfront fee. This can range from hundreds to hundreds of thousands of dollars.

What is a franchise?

A franchise is a business in which independent entrepreneurs use the rights to a larger company’s business name, logo, and products to operate an individual location. The franchiser is the owner of the larger company who sells the rights to license their business, and the franchisee is the third-party owner and operator of the business locations.

How long does it take to run a McDonald's franchise?

The franchise term for McDonald’s, for example, is 20 years.

How long does it take to get started with 7-11?

As the #1 convenience store, 7-Eleven is seeing unprecedented growth. Its stores are turnkey and you can get started within three to six months, including application, testing, and training.

Why are companies actively looking for new opportunities?

They’re actively looking for new opportunities because they’re still in the initial stages of expanding their reach.

Is it good to own a franchise?

Owning a franchise has countless benefits. You can profit from the franchiser’s recognizable brand while essentially running your own operation. The most profitable franchises rarely fail, removing the risks typically associated with opening a brand new business.

What is franchise investment?

All franchises come with some kind of investment, which usually comprises corporate fees, startup costs, real estate, staff, equipment and other expenses, too. Your investment will be contingent on several things, but the two most important are the mandatory expenses set by the parent company to get up and running as well as the regional expenses that dictate costs (in other words, some markets are more expensive than others).

What type of loan do entrepreneurs take?

Many entrepreneurs choose to take advantage of a business loan, including SBA loans, business lines of credit, term loans and equipment financing. To begin, check out the best franchise financing options.

Is Ace Hardware a good franchise?

Ace Hardware is an excellent franchise prospect for providing an antidote to the big-box home improvement store experience, which is typically marked by unhelpful staff and overwhelming product choices. Instead, Ace Hardware locations pride themselves on hiring staff that put customer service at a premium and keeping product choices to a reasonable selection. Their franchises make it easier for local hardware stores to remain competitive against mega-stores by way of their cooperative structure and store-brand products.

Is McDonald's the most expensive franchise?

We’re pretty positive this is a name you know. McDonald’s is one of the more expensive franchises around, but has perhaps the best brand recognition in the world. If you’re able to open a McDonald’s franchise in a well-trafficked area without much competition, you may be able to quickly recoup the initial investment.

Is it hard to find a franchise?

Still, just knowing you’re interested in a franchise is only the beginning; in reality, finding the best franchise opportunities can be a challenge. There are more franchises out there than one can reasonably count and consider, making it tough to figure out which one is right for you.

Is Kiddie Academy a franchise?

There are franchise opportunities throughout 49 states (sorry, Montana) and plenty of room to grow.

Is Primrose a franchise?

Early childhood education is a prime market for franchise opportunities as parents look to give children every opportunity to learn — even within their early years of education. Primrose Schools are a solid franchise because they offer educational programs all year round, are licensed facilities for educational child care and give their teachers continuing education access to keep their skills sharp.