The search for the right franchise for you can be both exciting and exhausting. As with job searching, you really have to be selective, do your due-diligence and ask the right questions before making a decision to sign a franchise agreement.
If you really want to be your own boss, it is essential to take your time in making the decision to open a franchise. The following information can provide you with a good start down the right path to successful franchising.
Below are five questions to ask when considering a franchise opportunity:
- When the owner was doing their own due-diligence, what competitors did they discover in the same market? This may help you discover any competitors you may have missed in your own search.
- How does the owner and other franchisees deal with these competitors?This can help you determine if the competitors you found our legitimate in the marketplace. It also can help determine how saturated this industry may be, and if there is room in the market share for one more.
- How long does it typically take to break even? You need to know when you can expect your revenue to cover expenses.
- How much can one expect to make in the first year or second year?Although this is a difficult question to ask, it is an important one. Don’t ask this question right off the bat, as it may put off the franchiser.
- If I were a member of your family, would you recommend this franchise to me? This may seem like an odd question, but it may reveal a lot about this opportunity.
When you find a worthwhile opportunity, it is then time to decide whether to buy-in to the franchise. Since doing so costs about $30,000 on average, it is still important to review everything carefully before making your decision.
At this point, it may be wise to obtain advice and guidance from an experienced business law attorney. He or she can protect your best interests throughout the franchise agreement process.