Category: Newsletter

Choosing The Right Franchise For You

Post author By Ethan Theo
Post date April 5, 2009

You have two big decisions to make when deliberating over whether to use a franchise opportunity to set up a business. If you have already determined that a franchise may be the way to go for you then you have to choose the right one, but how can you do that?
First, you have to analyze yourself in depth to ensure that you have the personal skills, wants, and needs. You have to know exactly what you are capable of and the extent of your business aspirations. Brainstorming is a handy tool to use in this situation and it is essential that you do so before investigating current franchise opportunities that are available. Starting with industry analysis is the best route because you can then match your skill set to the industry requirements. As such, you can then narrow down your options to a few select industries before assessing whether those franchise options would work in your local geographic area. Only then can you begin to contact the franchisors and create a business plan.
When contacting franchisors about possible opportunities, always ask them to send you franchise information. If they are to be trusted then this should be available at no cost. When you receive the information, be sure to read it extremely carefully, paying attention to every detail. Do not take anything at face value and research every detail given in depth. After all, this is your future and no stone should be left unturned. You can use trade magazines, Internet profiles, professional journals, and annual reports. You should also contact the Federal Trade Commission (FTC) and local authorities to make sure that there are no issues with the franchisor. You should extensively look into the reputation, financial health, growth, management, and day to day running of the business because it will be passed onto you as a franchisee.
When you have digested all of the above information and you are happy with it, ask for details of existing franchisees. It is essential to speak to them because they can give you an accurate viewpoint of how the franchisor runs the business, what the management is like to deal with, insider secrets, how the business is faring, and so on. Any good franchisor will be more than happy to provide this information whereas others may be reticent. Franchisees provide critical information so again only pursue franchises that are accessible. Only then should you assemble a legal team and accountant to answer any legal and financial questions you may have. They will also be able to find any holes that you have yet to discover, thus protecting your own interests.
About the Author:

GlobalBX provides a FREE business for sale exchange connecting business buyers, sellers and lenders. Search over 32,000 businesses for sale and franchise opportunities. Sell a business for free with no listing fees and zero commissions. We have all the top franchises as well as franchise resales. Find franchise reviews and get free franchise information. You can also contact over 300 lenders directly and get a business loan.

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Questions To Ask Before Buying A Franchise

Post author By Ethan Theo
Post date March 6, 2009

Where other businesses struggle, franchise businesses thrive. Wendy’s and McDonald’s are prime examples of successful franchise businesses, and also provide inspiration for those individuals who really want to form their own successful businesses in the future. With a brand behind you and a good idea of what does and does not sell, it is no wonder that you have chosen to consider a franchise.
There are two types of franchises out there. One is the good franchise that takes care of its franchisees, providing training and support throughout. The second type does nothing but take from the franchisee and pushes for profit. There is a third type of franchise and that is the one that will rip off franchisees, taking them for as much money as possible. The latter two are not worth the time, money and energy, whereas the former is extremely desirable.
As such, it is essential that you do your research and investigate a franchise thoroughly before signing a contract or paying out any money. The list of questions below may help you to find the better ones as the answers they will yield will give you enough information to make an informed decision:
1. Have you and your attorney analyzed the franchise agreement in detail and do you both completely agree with the details?
2. Are there any elements or step required of you that would break the law or be to the detriment of yourself or your country?
3. Do the provisions in the franchise agreement give you exclusive territory for the period of your contract? If not, what is the maximum number of franchises that may open in your area?
4. Is this franchisor connected in any way with any other franchise company handling similar products or services?
5. If you answered yes to the above question, what is your protection against the second franchising company?
6. If you decide to end the franchising contract for any reason, what are the provisions for you to pull out of the contract and how much would you have to pay to break the agreement?
7. Are you able to sell your franchise during or at the end of your contract? If you are legally allowed to do so, what are the repercussions related to compensation?
8. What time period represents the duration of your contract and how long has the franchisor actually been in full operation?
9. Does the company offering you this franchise have a reputation for honesty and fair dealing among its franchisees?
10. Has the franchisor shown you any certified figures indicating exact net profits of one or more of its members, and have you personally checked the figures with these people?
11. Are you able to tap into franchisor assistance with training, PR, advertising, capital, credit or merchandising?
12. Are you offered assistance for finding the best location possible in your chosen area?
13. Does the franchising firm have solid financial input to ensure stability and the establishment of goals?
14. Does the franchisor have experienced management, trained in-depth?
15. Can the franchisor do anything above and beyond what you are capable of yourself?
16. Have investigations into your background been carried out and has the franchisor been assured that you are capable of making a profit?
17. Does the state in which you live in have franchising laws in place, and does the franchisor adhere to them completely?
18. How much equity capital will you need to purchase the franchise and operate it until your income equals your expenses?
It is extremely important to answer these questions fully and to your complete satisfaction. If this is the case then you may be extremely eager to become a franchisee. However, you should research all answers to get them verified in several places to ensure that your investment would be a wise one.
Purchasing a franchise can provide you with stability and profits in a short period of time but that is not to say that it is infallible. Less than 20% of all franchises fail so you need to ensure that you do not become a statistic. Information regarding specific franchising ideas can be found in the franchising directories, which are generally available at the local library. This will give you a little assistance to get started but you need to ensure that you are completely happy before committing.
About the Author:

GlobalBX provides a FREE business for sale exchange connecting business buyers, sellers and lenders. Search over 32,000 businesses for sale and franchise opportunities. Sell a business for free with no listing fees and zero commissions. We have all the top franchises as well as franchise resales. Find franchise reviews and get free franchise information. You can also contact over 300 lenders directly and get a business loan.