The idea of working for yourself is intriguing. The thought of opening up your own shop or restaurant is exciting. The process of becoming a franchisee is doable. So is franchising right for you?
According to Entrepreneur, “More than 7 million people draw their paychecks from a franchised business.” Across America that translates to more than half-a-million franchised businesses. But before you make the leap to becoming a franchisee, the International Franchise Association recommends asking yourself these 10 key questions:
- Are you ready to work hard? A franchise can give you start-up support, sure, but making your business successful requires real commitment, some long hours and a willingness to do everything from cleaning to handling upset customers. The majority of franchises need hands-on management to thrive, particularly in the early years.
- Which businesses do you like? Just as with any job, the franchise you pick should offer you something you enjoy doing. Think long and hard about what area you can envision working in for the next 5, 10, 15 years or more.
- Can you be consistent? Franchises are successful because all of their locations offer consistency. Following the corporate formula is important. Be honest about whether or not that kind of conformity is for you.
- Are you a people person? Owning a franchise demands people skills—do you have a good track record of dealing with fellow employees, supervisors or managers?
- Do you have the capital? Many franchise locations fail because their owners don’t have the money needed to cover costs until the business becomes profitable. Be sure you have enough for not only the start-up costs, but also enough cushion to keep the business afloat until it is making money.
- Have you discussed all legal documents with your lawyer? All franchises must supply a franchise disclosure agreement that spells out the terms of your franchise agreement. These documents should be carefully reviewed with an attorney.
- Is the franchise you’ve picked successful? Have an accountant look over the financial analysis of the franchise you are interested in to see if they are solid and successful.
- Have you checked references? The disclosure document will also give you the names of other franchise owners. It might help you make your decision if you talk to others about the franchise and what their experience has been. Did they feel supported? Were they given the tools to help them succeed?
- Does your potential franchisor have a strong corporate team? You are hoping to have a long-term relationship with your franchisor, so it is important that you like the people you will be working with on their staff.
- Do you have support from family and friends? Opening a new business is an exciting challenge, but a challenge nonetheless. It is going to take a lot of your time and energy, especially in the beginning, and an understanding support system of family and friends can be very helpful.
If you feel you are ready to be a franchisee, check out some of the key characteristics that make a successful Sylvan franchisee!