The beauty of the franchise business model is that it allows individuals to start their own businesses without the sweat equity and headaches associated with starting a business from scratch. No reinventing the wheel here. Hundreds and hundreds of franchise systems have already perfected the products, services, and delivery mechanisms into a proven and successful formula. That's a distinct advantage. But as a first-time franchise prospect how can you ensure that you choose the right system? Are some systems more suited for you than others? What will be your strategy for choosing the right franchise opportunity? These are all important questions that we'll try to answer in this section.
Anyone considering a franchise business opportunity needs to take a hard look in the mirror. Franchising is a business model that works well but is not always for everyone. Before you can select a franchise brand you should make sure you are "built" for franchising. You'll be your own boss, to a degree. But you'll also be expected to follow system standards and rules and regularly report operational and financial information - and pay royalties. Think about how you like to operate. Do a complete assessment of your strengths and weaknesses as a business person. Think about your management style and skills - hands-on, delegator, micro-manager?
Some franchise brands will require long retail hours, others will require working closely with employees and customers, still others will demand constant traveling around town or throughout the territory. Perhaps one of the most important factors to consider is whether you are deeply interested and passionate about the franchise brand/product/service you are considering. It's difficult to be truly successful with something you don't whole-heartedly believe in. As you can quickly see, your personality and business style will be a significant part of the kind of franchise system you decide to team up with.
Taking a systematic look at the franchising opportunities available is a tall order. But there are several ways to go about you due diligence process. You might begin by asking friends and acquaintances that have been in franchising for their perspectives. They're likely to have some advice that will help you move through the process. It's also often very easy - and informative - to visit with a franchisee in your area and ask pointed questions about franchising one-on-one. Many times these individuals can provide a wealth of knowledge and are more than glad to share their thoughts.
Many franchise prospects turn to franchise brokers for help. These "consultants" are a lot like real estate agents. They generally know the franchise marketplace and most of the major players - and they know what these players are looking for in franchisees. By learning your desires, strengths, and weaknesses, these brokers can help you narrow down franchise brands that match your parameters. It's important to be aware that franchise brokers generally represent a group of brands that compensate them for prospect leads. Nevertheless, brokers can be an effective tool in your franchise selection arsenal.
Others may want to "do-it-yourself" or simply proceed at your own speed when it comes to identifying a franchise. That's doable but requires more effort. You might start by searching for "franchise-themed" or "small business" meetings and conventions in and around your city or nearby. Often, you'll have the chance to meet with franchise representatives from numerous brands that can speak with you and answer questions you may have.
You might also check out the Wall Street Journal, Entrepreneur Magazine, or other business media for ads and information about franchising opportunities.
Technology has brought the Internet into the fold as another great search tool. There are numerous portal sites online that can help you sort through franchises by industry, region, investment levels, and more.
Following these steps should help you decide what brand is the closest match for your strengths, investment level, and territory. Next up, investing and infrastructure.
15.2: The Right Economy
15.4: Making It Work