Buying a Franchise? Ask Yourself These Questions First
Thinking about buying a franchise? Don’t make any decisions until you’ve asked yourself these tough questions.
Can you stick to the system?
A franchise delivers a proven business model, but you have to apply it as it was intended, or the franchise won’t succeed.
Do you have the necessary hard skills?
Training is provided, but opening a chicken restaurant isn’t a wise choice for someone with no hospitality experience whatsoever. Consider your strengths and weaknesses and consider what industry would make the best fit for your skills.
Does it fit your work-life balance goals?
There are some franchises that demand a lot of time and attention, and require full-time attention, and there are others that can be managed from a distance.
How much money is it going to cost?
Get an understanding of the total costs involved. What is the initial franchise fee? What about ongoing management service fees, equipment rental costs, marketing and working capital? Is it an affordable part time franchise?
How much income do you need?
You have to be realistic about your financial needs because you could be facing some lean times while you wait for the business to turn a profit. While it’s impossible to put an exact timeline on probability, most businesses don’t turn a profit in the first year.
What type of support do I have?
Franchising means access to the parent company’s resources but ask about the ongoing support and training that are provided throughout your time with the company. Will there be marketing assistance? Are there field visits? Will there be technology training on the systems and a support team on hand?
Here’s the most important question, and it’s a big one, so brace yourself.
Are you passionate about this?
That’s the crux of it. Even if you tick every other box, if you can’t tick the enjoy box, you’re chasing profit over everything, and you will only make yourself miserable in the process. It’s the quickest way to guarantee you despise your job.
That’s why many people turn to buying a franchise. It provides flexibility, whether you’re looking for part time work for stay at home mums or want to be a flexible part time franchise. While independent startups and franchises have similar success rates five years down the line, more franchises make it that far.
According to the International Franchise Association, some 90% of franchises weather the initial two-year storm while only 20% of independents survive. So, there is safety in a franchise at the start that you don’t have if you start an independent business. The franchise gives you the brand, which can be the key to early success.
