If you’ve always wanted to own a business, a franchise can look very attractive. It has powerful brand recognition and the corporation does most of the work in setting up your store and they usually require less up-front capital to get started than independent businesses. However, before you jump into it, you should pay heed to these six essential tips in order to avoid some common mistakes.
1. Choose wisely
Don’t just consider one franchise. Take an inventory of all the things you want in a business, then look at all the available options that fit the path that you want to take. When you have it narrowed down to a few options, weigh the pros and cons before deciding on a final choice.
2. You don’t have to be an expert
If there is a franchise that you really love, but you don’t have any experience or expertise in that industry, it doesn’t mean you should pass on your dream. It only means that you need to take some time to educate yourself and do enough research until you’re confident that you can manage your franchise wisely. Passion for your industry will take you further than your initial level of knowledge.
3. Do research before committing
If you think you have a franchise picked out, get some feedback from existing franchisees who can give you some first-hand information about what the day-to-day experience is like. You also need to thoroughly research the franchise agreement. Before you sign on the dotted line, ask questions about any points that seem slightly vague or that you don’t completely understand.
4. Get the right financing
Be informed about how much down payment you need to make out-of-pocket for the type of franchise you have chosen. Know about programs that can ease your task of acquiring startup capital, such as SBA loans and rollover business startup programs that allow you to invest your 401k.
5. Evaluate the people behind the franchise
Many businesses have failed due to bad relationships between partners. Before you jump into a partnership with a franchise, make sure you mesh well with its people. You will be dealing with them for many years, so you need to make sure that there will be no problems with communication or personality conflicts.
6. Don’t be afraid to ask for help
As a first-time franchisee, it’s inevitable that you will hit some roadblocks and situations that you don’t know how to handle. At times like this, you can’t afford to let pride prevent you from seeking help from your franchisor or other franchisees who have more experience.
These are just a few of the most essential tips that should help you avoid major pitfalls in your quest to become a franchisee. Proper planning and research will ensure your success.