Signing With a Franchise: 5 Factors to Consider First
If you are thinking of opening a franchise, you are in for the ride of your life. Opening a franchise is a bit easier than building your own business from the ground up, but there are still a lot of skills that you will need to learn as quickly as possible. There are plenty of ways to do it right, and plenty of common mistakes to avoid – you just have to know how to look out for them. If you’ve got the ambition and the drive, but aren’t sure where to start, here are five factors to consider when signing with a franchise.
- Make sure that you read the fine print – there may be something in the fine print that may be prohibitive or that may hurt you in the long run. Major corporations have teams of the best lawyers in the world and sometimes they take risks. However, they are smart enough to make sure that they are not the ones who suffer the consequences of those risks. If you feel as though they are in an experimental mode in their development, be sure to read all of the fine print.
- Make sure that the franchise business has a good rating – you can look at FranchiseExpo.Com to look at all the ratings. It doesn’t get any easier than that. In an instant you can compare all different kinds of franchises and get in tune with their business models to see what jibes best with you. However, if you find a business that you love, but the franchise has a terrible rating, you won’t want to give it much more thought.
- Make sure that you understand all the costs involved – some franchises may be too expensive to open and there may be too many clauses that involve you paying even more money. If you don’t have the capital to really make the investment on your own, then don’t take any risks. If you do, you could be in for serious heartbreak and bankruptcy. You want to know exactly what to expect in every way possible.
- Make sure that you believe in the product – if the franchise sells chicken, you want to a fervent connoisseur of chicken. Chicken should be your passion in life and you really have to believe that you are selling the best chicken. No matter what kind of business you open, you have to be selling a product that you love. If you would not patronize your own business on a regular basis, then why would anyone else?
- Make sure that that there is a market for your franchise – some franchises may not be popular in some areas and you could be opening a dud. When it comes down to it, you can do a little research to make sure that the people in your community will enjoy your franchise. For example, a chain of teahouses that is highly successful in Great Britain probably won’t see the same success in Texas or Wyoming.