Once you've examined yourself and considered the broker question, it's time to take the next step. Now you want to look at the various industries and sectors that are attractive and - hopefully - a good match for your skill set.
Making a List
make a short list of the kinds of industries you're interested in - food service, senior care, home repair, etc. Review the players, the competition, and any regional strengths and weaknesses for the industries you're considering. Older, more established brands may look safe and solid but could be less flexible to deal with. Likewise, newer brands may be big on innovation, but could be short of cash, or worse, struggling financially. Evaluate your risks carefully.
Now begin to zero in on a single franchise sector. Start visiting the various franchisors' websites. Most will have plenty of franchising information available online. Send an email request for more information or pick up the phone and call the main office. Note who gives you the best information and how quickly, as this could be an indication on how things will be down the line if you join their franchise system. Be on the lookout for the differing "philosophies" of the franchises. Follow your instincts as to how these styles and approaches align with your personal style and beliefs.
Take a good hard look at franchise fees, investment requirements, and ongoing royalty fee structures. This is key to your evaluation process and can save you and the franchisor a lot of time. Look for ranges you are comfortable with, both up front and ongoing. Get clear on what is offered to franchisees in terms of operations, training, marketing, and technical support. Don't be afraid to ask any question.
Soon you will begin to interact with franchise executives, who will most likely engage you through a series of emails that contain all kinds of information and testimonials. And you will most certainly begin a series of phone conversations. This is how both parties size each other up to determine if there is a proper fit.
The interaction will become more regular and, if promising, will ultimately lead to face-to-face meeting with the franchisor. You also will receive a franchise disclosure document (FDD). The FDD is a legal document that must be provided by the franchisor to the prospective franchisee at least 14 calendar days before any agreement of sale is signed and finalized. Its purpose is to provide prospective franchisees with enough information to help them make an informed decision about buying the franchise. The document is packed with information. You should have a franchise attorney review the FDD with you.
Although there are many more steps involved in the process of becoming a franchisee, at this stage in the game you're well on the way to making the franchise decision.
5.1: Time for a Choice
6.2: Matching Your Qualifications