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Buying A Franchise is It Worth It

Updated on August 21, 2017

Buying A Franchise

When you are thinking of buying a franchise, you think of all the profits you'd make.

You think of obtaining a franchise as a ticket to immediate success and a shortcut to the upper rung of the ladder to prosperity.

However, it sometimes is not worth the effort and you need to identify this in the earlier stages of buying a franchise rather than cry over spilled milk later.

Before you think of buying or purchasing a franchise, think of answering a few questions like: are you sure you want to target the industry that you have chosen?

Franchise Business Opportunity
Franchise Business Opportunity

Is A Franchise Business The Right Way To Go?

Is the franchise small or big?

Are you going to benefit from the franchise's popularity?

Is there a need for this franchise to operate in the geographical location you have chosen?

Are the regulations surrounding the administration of a franchise liberal enough for you to practice your business philosophies?

If you do not understand these questions, you probably need to rethink your strategies and aims.

It is probably not worth spending time on obtaining a franchise if you feel that the rules and regulations surrounding its operations are extremely restricting and limiting. Each franchise has to follow the guidelines and service manuals set by the franchiser and you have to follow them down to the last point.

If the rules do not strike a chord with you, it's worth negotiating or canceling the deal. However, if you have already purchased the franchise, you have to follow each of these commandments.

Do your finances grant you enough leverage to operate the franchise services in the long run?

If not, then it is better for you not to go ahead with purchasing the offer. The franchiser wants to see his franchise succeed and would not like it if you are unable to run the affairs smoothly. It is just because of this that the franchiser insists on checking your financial details to the core before you take on a franchise.

Before buying a franchise, make sure that you are up for the task and that you are willing to go the whole yard with the business that is being put into your lap. Where purchasing a franchise can lend you with a quick way to success, it can be a difficult road to tread if not much consideration has been put in place before the purchase.

Make sure that you completely understand the terms and conditions under which you purchase the franchise. You can never be sure enough as to what you get in the end.

Many people have had a wonderful experience buying a franchise. They have mad a great return on their investment and have great things to say about it. Others have had a difficult and challenging experience, so their opinion will be swayed by their experience.

Having an open mind and good foresight will help you making your decision. Join up with people you know that have owned a franchise in the past to see their perspective. In the end, follow you heart and trust that everything will work out the way it was intended.

How Franchising Works
How Franchising Works

How Franchising Works

The thought of becoming a franchise owner has crossed your mind a time or two.

And now you're thinking that this year may be the right time for you to look into the franchises that are available in your area.

But first, you should learn how franchising works. Getting the most accurate information will help you make sound business decisions, and could help you to be a company owner in less time than you think.

Getting an idea of how franchising works will take some of the pressure off you as a business owner. If you have the money to buy a business, but you don't necessarily want to come up with an idea from scratch, then starting a franchise is probably the best choice for you.

You'll typically need to pay a fee in order to get started, and this fee can range from a few thousands of dollars to hundreds of thousands of dollars. The fee that you pay will depend on the type of business that you want to become a part of, as well as how well-established the franchise is.

After you pay your fee, your franchise will provide you with all the information and materials that you'll need to be successful. You get more details on how franchising works when you undergo training that will help you to become more familiar with the company that you're now a part of. Since franchises are a part of a brand that has already been established, there are already several operational rules that have been put into place to help move your business forward in a short amount of time.

For instance, if you're a franchise owner of a restaurant, all of food should be made the same way as it in in other restaurants that are part of the chain. The uniforms of employees are very similar if not identical, and the handbook that you use to determine the rules and regulations pretty much looks the same way it would if you visited another branch in your city or state.

When you're learning how franchising works, you should also be aware of the pros and cons of buying a business that is a franchise.

The main benefit is that you can piggyback of the success of the overall corporate name. This gives a number of people the chance to grow, so that they can become independent business owners over time. However, starting a franchise can be very costly, and you don't have complete control over your business.

If you want to get more information on how to make the right decision on the purchasing the franchise that you want, you should check your local business directory to get more information on how you can attend franchising networking events that will help to sway you in the right direction.

How To Choose the Right Business Franchise

Getting It Right The First Time

When you are thinking of buying a franchise, your decision should be carefully balanced and should concern some basic understanding of the type of franchise you are looking for. Following are some pointers you need to consider.

Choosing an industry: You need to choose the industry that best suits your needs. Your best bet is to choose the industry that you would love to work in. Many people do not like what they're doing; but when it comes to franchises, you get to make the decision as to what industry you want to commit to.

Type of franchise: Franchises can be of various kinds, but the two major classifications of a franchise are: a services franchise" and a "management franchise". In a services franchise, you are required to do the majority of the work and while doing that you need to follow a set of guidelines drafted in the contract. In a management franchise, you basically need to just organize and gather others to do the labor and work.

Size of a franchise: Franchises can come in two different sizes: large franchise operations and small franchise operations. In large franchise operations, you get the advantage of a recognizable brand, an existing customer base and proven business models and methods. Large franchises do not involve that much of a risk either as they are protected by standards accumulated over time.

Such franchises are stricter in implementing rules and regulations and demand higher levels of quality and service. In smaller franchises, you are presented with a simpler system of business and a direct relationship with the senior administration. Help is more accessible but a smaller budget and limited resources curb you from growing fast enough.

Profitability, demand and popularity: In the business of franchises, people begin to think that if a franchise is popular, it would most certainly be productive and profitable.

It seldom is the case.

While most of the larger franchises get recognition and customers, it is down to you to maneuver your business models to generate more revenue for you. It doesn't mean that if every town has a McDonalds, you should buy that franchise. You can buy a smaller franchise and yet be profitable.

The above would just help you narrow down your list of options. Once you decide what franchise you need, the actual challenge begins then only. You have to get in touch with the franchiser and study even more about the franchise at offer to finally make a decision.

If you're still having a difficult time choosing the right franchise for your life, you can always hire a consultant. A consultant will take care of all the ground work and research for you. They will be able to list the positives and negatives to each franchise you are considering.

They will simplify the process and make it easy and enjoyable for you. If you find yourself overwhelmed and don't know where to turn, it's always a good idea to use a consultant.

Not only do they simplify the process but they've been in the industry for years so they have a wealth of knowledge and experience you can trust.

Franchise Directory
Franchise Directory

Find A Business In The Franchise Directory

Where to locate a suitable business franchise

There are a number of franchise directory resources on the internet that you can take advantage of.

This is also one of the fastest and easiest ways to find the franchises in your area that are for sale. Not only will you see which companies are selling a franchise, but you can take a look at the investment levels of the company, as well as the type of training you'll have to undergo in order to become a business owner.

Any franchise directory that you find should also provide you with contact information, so you can get in touch with the people that can help you to get started with the franchise purchasing process.

There's usually a franchise directory or two in trade magazines. When you read these publications, you'll not only get the listing(s) for local franchises, but you'll be able to find out more about industry news that will help you make the right choice about owning a franchise.

Check out magazines like the Franchise Times or Entrepreneur, so that you can find out what other business owners are saying about the current market. This will keep you on top of your game when you're looking for locations in your city, and will warn you about certain pitfalls that you should watch out for once you're ready to sign the papers for your own franchise.

If you don't find exactly what you're looking for when you're searching for on paper, you can also visit some franchise conventions. There are a number of trade shows that may be taking place in your area, and you can attend these events in order to do some networking with other potential business owners.

You can also conduct some mini-interviews with franchise owners, and you may even find some businesses that you haven't heard of before. This is somewhat of a 'live' franchise directory, so you should take your business cards with you, so that you can leave your contact information with the right people.

Be sure that you also have a way to keep up with all the people you've met as well, so that you can use the process of elimination to come up with a business that is just right for your interests, time, and budget.

Check out sites like or for additional information.

Franchise Financing
Franchise Financing

Finding Franchise Financing

How To Find The Funds Your Need To Finance Your Business Venture

You know that you have the business experience that it takes to run a franchise business--but you're not sure where to get the start-up funds.

If you want to get your business up and running without overextending your budget, there are a number of resources you can consider. Here are a few ideas that will help.

Before you start actively looking for franchise financing, you should make sure that you know how much you're going to need. The start-up amount should include all the franchise fees that are associated with opening the business doors.

You should also factor in royalty payments to the franchiser, as well as advertising fees that the franchiser may charge you when you are marketing the opening of your new business.

Small Franchise Business Do Not Offer Financing

Most of the franchise companies that you're considering won't provide financing, but it doesn't hurt to ask. There are a few companies that will pay for some aspects of your business start-up, such as Subway and 7 Eleven. Subway will help to finance your franchise fees, and 7 Eleven will finance your payroll and inventory.

A number of franchises will also provide you with the information for third party financing, which could be really helpful. Companies like Textron, Banco Popular, and GE Capital may be able to offer you loans and financial incentives that will help you to open a business much sooner. You can also work closely with a franchise broker if you think that a third party may be best for you.

You can go to your bank to learn more about franchise financing as well. It can be a bit of a challenge to get a bank to finance a franchise, but if your credit score is decent, getting a loan may be possible. You may have to settle for an additional loan on your house in order to fund the cost of business opening.

If you're thinking of going with this option, you should do some work in order to make put your credit score in good shape before applying for the loan. Pay off any existing debts you have, and make sure that your credit card payments are up to date. This will make you eligible for more money.

You can also check out the franchise directory and registry that is available through the Small Business Administration. If you register through the SBA, this will reduce the risk to banks for small business loans. If the franchise you want to become a part of is affiliated with the SBA program, it will be much easier for you to get bank financing.

Visit for more details.

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    • webcat profile imageAUTHOR


      5 years ago from Australia

      @indyfranchiselaw: Yes there is so much information that people just don't know when it comes to buying a franchise. I have been managing a small franchise business in Australia for the last 5 years and it still amazes me at what people don't know.

    • profile image


      5 years ago

      Glad to see there someone else as passionate about franchising as I am. Keep up the good work!!


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