Things To Consider When Evaluating Franchises

The idea of franchising sounds great – a business in a box! You pay your fees, and the franchise company gives you the training, branding, and support to be successful. Pretty easy right?

The truth is, no two franchises are the same, and it can be quite difficult to find the right type of franchise and identify which brand best suits your wants and needs within that category. Whether you are a seasoned entrepreneur looking to diversify your portfolio, or a newcomer looking to break out of the typical 9-5 grind, here are a few things to consider.

Identifying categories of interest:

A simple search of “franchise opportunities” on the internet will flood you with endless brands looking to expand their footprint. They all boast that they are the best in class, but how do you differentiate them? The most common categories are Fast Food, Retail, Automotive, and Service type business models. The key questions to ask yourself are:

• What type of business category interests me on a personal level? Passion is often what differentiates small business owners. Building a business with something you are truly interested in will not only help motivate your employees but give better service to your customers as well.
• How much competition is there in my market for my category of interest? If there are too many established competitors in your market, it may be hard to break through the noise even if you have a great business model.
• How long has this category been around? It may be tempting to jump on the latest food trend, but longevity is an important factor when thinking about a long-term franchise commitment.

Compare Brands

Once you have identified your category of choice, you must start comparing the different brand options within that category.

• Brand Reputation - Research the reputation and track record of the franchise company to ensure their values align with yours. Make sure they have a list of successful franchisees you can speak with.
• Financial Investment and Viability – What is the start-up investment? What are the ongoing monthly fees? It is important to understand what your costs will be as a franchise owner, but it’s also important to understand whether the corporate company is profitable. If the corporate office is bleeding cash, they will likely make rash decisions that could negatively impact your business. A lot of this information can be found in the company’s Franchise Disclosure Document (FDD).
• Training and Support - Does the company offer training in-house? Do they have dedicated trainers? Initial and ongoing support are vital aspects to being successful within a franchise system.

Franchising presents a wealth of opportunities for entrepreneurs to capitalize on their business aspirations while reducing many of the risks associated with starting a business completely from scratch. By exploring multiple franchise options across various industries, aspiring business owners can find the perfect fit to match their entrepreneurial spirit. With careful consideration, strategic planning, and a passion to succeed, franchising can offer a once-in-a-lifetime opportunity to take control of your future.