Which Franchise is Right for me? Guide to Choosing The Right Franchise Opportunity

When looking for a franchise opportunity to buy, you must do your research well to avoid making mistakes. You should know what to look for in a franchise opportunity to know if it is right for you. Owning a franchise is a commitment that will last a long time; hence the need to be careful in selecting one.

This article is especially for entrepreneurs who intend to buy a franchise but are unsure which one is right for them. If buying a franchise is what you want, you should first ask yourself certain questions. Your reply to each question would determine your next move. Below are important questions you should ask yourself before choosing a franchise opportunity.

Top 9 Questions you Should Ask Yourself Before Buying a Franchise

1. Do I want to buy a franchise or establish my own business?

Choosing between establishing a small business or purchasing a franchise can be hard, but you must decide if you want to make headway. Some entrepreneurs find it hard to follow the rules; they prefer having their own business as they believe it comes with complete freedom and the opportunity to make rules without any hindrance. If you are one of those entrepreneurs, buying a franchise will not be a good choice.

Buying a franchise entails being under an already established business with a proven business system and following the rules, regulations, or guidelines laid out by the business owner. You will have to decide if you want to buy a franchise, as you won't want to venture into something that makes you uncomfortable. Venturing into franchising when you are uncomfortable with it, might lead to bad results and regrets.

       2. What do I intend to gain from a franchise business?

The next thing you need to know after deciding to go with franchising is your goal of wanting to buy a franchise or what you intend to achieve from buying a franchise. People purchase franchises for different reasons.

Do you want to buy a franchise because of your passion for business, or do you want to have a side business? Do you intend to buy more franchises in the future? Do you buy a franchise because it's your hobby or you want to make money? Is your reason for building equity? Deciding which area to specialize in will be much easier when you know your personal goals. The type of business you choose should reflect what you are trying to achieve.

      3. What is My Budget?

The cost of buying a franchise varies by industry and business model. Still, the common requirement of many franchises is that you must have a certain amount of capital before you can buy their franchise.

This capital may be for construction, equipment and other necessary items needed to start your franchise and keep it up and running when you eventually start. You should compare the initial amount required to invest to your potential return and income before buying a franchise.

Knowing how much you are willing to invest and the amount of potential income will help you decide on the right franchise to buy. Your budget goes a long way in determining your franchise choice, as you can only buy into the one you can afford.

Take your time to think it through and know the amount available to you. It is advisable to have more money than the amount you will need to open a franchise, as your franchise may not be profitable immediately after opening it.

      4. What am I good at?

The next step in deciding on a franchise to buy is finding your skills and interests. It is better to operate the franchise in an industry that interests you. It should also play to your skills.

 Understand your skills, the knowledge and experiences you have garnered in a previous job(s), and what you love doing. Decide if you can work with many people, or do you work better with fewer people? Do you like interacting with customers? Are you interested in drinks and food recipes? Do you have great culinary skills that you would like to practice?

Your interest and skills carry you through in every business. Leveraging your skills and doing what you know want to do will motivate you to work hard to grow your franchise.

For example, running a franchise in tutoring and prep for students would be difficult and boring when you do not have an interest in developing children. You may not initially know, but since you do not have the passion and skills, relating with students and inculcating knowledge will be difficult. But if you are a trained teacher passionate about teaching, doing this would be a good choice.

5. How long do I intend to run the franchise?

The next good question you should ask yourself is how long you intend to run the franchise. Some franchisees run their franchise for a few years and terminate the offer. Some others run it till they decide to retire and pass it on to an heir.

Knowing how long you intend to run the franchise will affect your decisions. It will also determine your agreement with your franchisor and the contract you will sign. Take your time to think it through before making other necessary steps in buying the franchise.

    6. What are my strengths and weaknesses?

If you want to be successful as a franchisee, you should know your strengths and weaknesses. You should do the work that you know best; apportion those you are not good at to experts in that area. For example, If you are not good at keeping accounts, you may want to hire the services of an accountant.

You do not necessarily need to be an expert in all fields to own a franchise. Do your best and leave the rest for people who are experts in other fields. But if you do not want to hire the services of others, you will then have to open a franchise you will be able to run alone. Knowing your strengths and your weaknesses is very important in your journey of opening a franchise.

        7. Will I be proud of doing this business?

Before deciding on opening a franchise, you must be sure it is a business you will be proud of. Let it be a business you can boldly advertise, and you won't be ashamed of people knowing you run a business like that. You will need the confidence to thrive in your franchise business, hence the need to choose a product or service you will be proud of.

       8. Can I take risks?

As you already know how much you may likely use to set up your franchise, you should also know that the business may not be as successful as you expect, especially at the beginning of opening your franchise. That’s to say, you may possibly lose money. So if you are the kind of person who can not take risks, you need to start preparing your mind.

       9. Can I give you all my time?

The quantity of time you can allocate to your franchise determines the kind of franchise you should open. Some people open a franchise as a part-time income opportunity. Maybe work in the morning, run their business in the afternoon or evening, or run the business in the morning and go to work later in the day. If your franchise requires your presence from 9 am to 5 pm each day, you will most likely not be able to take any other job. It would be best if you thought about this before going through the process of opening a franchise.

Steps to Choosing the Right Franchise Opportunity for Yourself

1. Study Market Demand

In choosing a franchise opportunity, try to minimize starting in a market with too much competition. Investing in a franchise with many other companies offering the same product or services will not benefit you. Too many companies in your field will only breed competition, and you will have to share your customers.

However, the lack of businesses offering the same product or services you intend to open a franchise in could mean low demand for that particular good or service. Ensure you study the market and business areas before choosing a franchise.

2. Choose a Product or Service You Are Passionate About

Before choosing a franchise opportunity, you should be sure it's something you love doing. As you will be investing a lot of time and resources in any franchise you choose, It would be best to open a franchise in something you are passionate about.

Doing this would help a great deal in the success of your business. When you are passionate about a business, you do it with happiness and dedication and will try as much as possible to make it successful. Being passionate about something gives you the zeal to succeed. 

3. Research Franchises

Research franchises, and if possible, list the businesses you want to buy your franchise from. You can research about good franchise businesses on the web, from franchise publications, or Franchise Consultants. You already know your goals and what you intend to achieve; finding the right franchise is the next step, and you should ensure that you make the right choice.

While researching for a good franchise, you must buy the franchise from a company that will support you through every stage of your franchise’s development. Also, endeavor to know about the advertising method of the franchise business you are buying. You won't want to make the mistake of buying into the wrong franchise.

4. Do Your Due Diligence

After deciding on the best franchise opportunity to buy into, it is time to do your due diligence. Finding a franchise opportunity to purchase does not mean you have taken the final step, as you can still change your mind if, after researching the franchise, you do not get an impressive result. You will need to find out some things, like the track record of the business, the training provided, the ongoing support you will get, and the culture of the company. Do not forget that whatever affects the large company will affect you also; hence, when you research your selected franchise and discover some factors that do not go down well with you, you may want to consider purchasing another brand.

 You will have to continue doing this until you get the best. Spending more time finding the right franchise would be best rather than wasting your money on an unfruitful venture.

5. Meet and Interview the Franchisor

Take the time to meet your franchisor before deciding if a franchise is good for you. Interview the franchisor to understand the terms and conditions involved in buying the franchise.

Franchisors with a healthy franchise system won't hesitate to respond to your questions with sincere points, unlike some franchisors with bad franchise systems whose remarks will have a lot of lies in them. A healthy franchise is characterized by people with vision, honesty, integrity and a strong concern for franchisees who invest in their business system.

6. Talk to other franchisees in the company.

What franchisees think about the larger company says a lot. Their views about the franchisor, the level of support they receive, and their ramp to profitability are valuable pieces of information to consider. If they tell good stories about the franchise business and the franchisor, it is a good sign you are going in the right direction. But if it turns out to be the other way around, you may need to rethink.

7. Review The Franchise Agreement

A franchise agreement is a legal contract that binds a franchisor and a franchisee. It gives a detailed explanation of what the franchisor expects from you according to the business's operating system. There is no standard for a franchise agreement; it all depends on the franchise company's terms, conditions and system of operation. The franchisee and franchisor both have to sign the agreement, but you should thoroughly read the agreement before signing. Having a franchise attorney review the agreement for you before signing would provide another level of comfort. The franchise agreement should state clearly that the franchisor would provide you with brand recognition and support; these are the two core factors you need. Ensure you understand the franchise agreement before you sign to avoid issues in the future.

Conclusion

Although franchises tend to be more successful than small start-up businesses, it still needs a lot of work and carefulness, as choosing the wrong franchise might be a disaster. Of course, it takes a lot of hard work, commitment and determination to succeed in any business and a franchise business is not an exception. Deciding on the right franchise opportunity can be overwhelming, but not to worry; this article has made it easier to find the right franchise opportunity to buy into.