Home
>
Small Business
>
How To Choose A Franchise

How To Choose A Franchise

You'd like to go into business for yourself, and believe that the best way for you to become your own boss is to buy a franchise. You know it will takes time and money to be successful, and that's OK. But which franchise should you buy? Which makes the most sense for you?

Here are some criteria that can help you make your decision:

1. What products or services would you enjoy selling?

What industries do you like, or dislike? Your best bet is to find a franchise in an industry you know at least a little bit about. All too typical is the case of the Chicago car salesman who decided to change careers and go into business for himself. He bought a basement waterproofing franchise but then found the business boring. He wanted to sell it, but sales weren't as high as he had expected they would be and he had trouble finding a buyer. He was stuck paying off the franchise fee and working at a business he didn't enjoy.

2. How much money do you have available to invest?

The amount of money you have available to invest in a franchise is an important factor. If you've only got $30,000 and the minimum investment for a specific franchise opportunity is $90,000, the opportunity isn't going to be right for you, no matter how much you like the company.

3. What's the total cost of purchase?

The franchise fee won't be your only expense. Find out what you can expect to pay for advertising, training, inventory, insurance, and all other costs in addition to the franchise fee and royalties.

4. How well established is the franchise?

How long has the franchise been in existence? Have they been in business for many years or are they brand-new? How many other franchises have they opened and where are they located?

5. How stable is the franchise?

What is the background of its officers? (Any history of litigation or bankruptcy of the franchise or its officers is supposed to be included in the disclosure document.)

6. What kind of track record does the franchise have?

Have most of their franchisees been successful? Names and addresses of franchisees in your state should be provided before you sign any contract. Call the people on the list and ask about their experiences.

7. What training is available?

Ask what training and support will be provided as part of your franchise fee. Will you get step-by-step instructions and hands-on training? What kinds of manuals and other materials will you get?

8. How close to your store can the franchisor let another franchisee set up shop?

9. Will you be required to purchase supplies or products from the parent company?

If so, compare your cost to the local retail prices of the same goods. There have been instances where the price from the franchise company for goods was higher than the price of the same goods in local retail stores. Selling anything under such conditions would be quite difficult.

10. What do the contract terms say about ownership? Can you sell out to someone else if you wish?

If you want to continue when the contract expires, will it be automatically renewed? Will you be able to convert your store into an independent operation if you should want to?

11. Determine how disputes will be handled should they arise. Watch for clauses requiring arbitration in the franchisor's home state if it is different than yours. Should a dispute arise, you'd have to travel to that state for arbitration hearings.

12. What criteria does the franchise use in selecting franchisees? Do they do any screening? Or, do they seem more interested in getting your franchise fee?

13. Does the franchise use high-pressure sales techniques to get you to sign on the dotted line?

14. Do you like the people you are dealing with?

15. How big is the market for the franchise's products or services in your area and how much competition is there now?

Janet Attard is the author of The Home Office and Small Business Answer Book. Find additional practical tips on choosing and buying a franchise at http://www.franchisetrade.com.

shuttle to Midway Beardstown .. Lockport Chicago limo O’Hare

In The News:

The FBI has issued a warning that scammers are impersonating doctors, police and banks using spoofed numbers as "smishing" texts surge nationwide.

Communities with unreliable internet service stand to gain after Amazon's Project Kuiper launched its first full batch of satellites into orbit April 28.

Tech expert Kurt “CyberGuy" Knutsson says unsubscribing from spam might actually backfire. Learn when to avoid it and stop junk effectively.

Tech expert Kurt “CyberGuy" Knutsson talks about how the first nonstop beating heart transplant, called zero ischemic time, at Taiwan hospital changes surgery.

Kurt “CyberGuy" Knutsson: FBI warns of "time-traveling" hackers.

Kurt “CyberGuy" Knutsson talks about a soft, vine-like robot called SPROUT that aids safe survivor rescues in collapsed buildings.

Health insurance giant Blue Shield of California confirmed it had been sharing private health data of 4.7 million users with Google for three years without even realizing it.

Delta and JetZero’s blended wing body aircraft marks a meaningful step toward a cleaner, quieter and more efficient future for air travel.

Recent reports show many common passwords can be cracked in literally seconds. Kurt the CyberGuy explains how to strengthen your passwords.

Stay up to date on the latest AI technology advancements and learn about the challenges and opportunities AI presents now and for the future.

Iron, a robot that stands 5 feet, 8 inches tall and weighs 154 pounds, combines advanced artificial intelligence with human-like movement and exceptional vision.

Hertz, the rental car giant, recently confirmed that customer information was exposed through a cyberattack on one of its software vendors.

There are a number of features with AirPods you may or may not know about to take your listening experience to the next level. Kurt the CyberGuy explains.

These 35 Chrome extensions have privacy and security concerns. Tech expert Kurt “CyberGuy" Knutsson says to delete them now.

Tech expert Kurt “CyberGuy" Knutsson says 329,000 mph fusion rocket promises to be fast, disruptive and enable deep-space missions.

Stay up to date on the latest AI technology advancements and learn about the challenges and opportunities AI presents now and for the future.

Tech expert Kurt “CyberGuy" Knutsson says a new autonomous AI is a game changer that also raises privacy risks. Is your data safe?

Tech expert Kurt “CyberGuy" Knutsson says robots and drones are revolutionizing fruit farming with faster picking and smarter handling.

Landmark Admin revises May 2024 cyberattack scope to show twice as many people were affected. Kurt “CyberGuy" Knutsson gives tips to help stay safe from an insurance data breach.

Tech expert Kurt “CyberGuy" Knutsson talks about how Yamaha’s hydrogen outboard motor could revolutionize boating with zero emissions.

Tech expert Kurt “CyberGuy" Knutsson reveals how to memorialize or remove a deceased loved one’s Facebook account and protect their digital legacy from misuse or scams.

Tech expert Kurt “CyberGuy" Knutsson says an Apple Watch saved psychiatrist Amanda Faulkner by detecting deadly leukemia early.

Scammers and fraudsters are increasingly targeting the most vulnerable, especially nursing homes and the personal data of their residents. Kurt the CyberGuy has safety tips.

Infected USB flash drives can spread malware among multiple organizations in ways that can easily bypass traditional security systems.

With a fully automated warehouse system and AI-powered robots, Ocado's Hive picks, packs and delivers grocery store orders in just a few minutes.