Franchise Blog

Surprising as it may seem, if you have been considering a business of your own, buying a franchise now can make a lot of sense. OK, perhaps if you were planning to buy into an expensive full-service restaurant worth millions and your budget is tight, it would definitely pay you to work through the numbers again, but let’s assume you are looking at something a little more down-market, a business that in a few years can support your family and give you the independence you want.

The biggest hurdle may well be funds as banks have definitely tightened up their lending policies, but even here there is a silver lining. Firstly nobody is going to trust their hard earned money to a fund manager for a while. Also fixed deposits are not going to be interesting for quite a while either, but there are plenty of people around who will be willing to invest in something as tangible as a business run by somebody with a gritty determination to succeed. Also there are quite a few people walking around wondering what to do with their severance package. So just because the financial industry turns out to have been built upon a house of cards, doesn’t mean you won’t be able to get the money you need.

Assuming you need any… There are some inexpensive ways to get into business and while not all of them are franchises, franchising does have some major advantages for the wannabe business owner. Firstly there is the “Branding”. Never underestimate the pulling power of a professional logo and tag-line. Brands that are recognised across the country are trusted far more than the one-off “Bill’s Windscreen Repair” shop that you whizz past everyday on your way to work. Secondly, the fact that there is more than oneof a certain business suggests that there is something successful about it and if there are many of them, then you know that the business does indeed work and the business name already has established a fair amount of credibility. Franchising splits up business functions nicely; the franchisor is responsible for conceiving the business model, product development, branding, marketing and purchasing. The franchisee is responsible for operating successfully in his local community. It really is a win-win situation.

So… back to financing. The present economic climate doesn’t mean you wont be able to find investors but it does mean you ought to be able to negotiate much better leasing arrangements, lower rents, lower payrolls, lower capital equipment costs and now fuel prices are crashing through the floor. Looking for talented people? There are more around now than there have been for many years and you can bet they are hungry for success. Also, try negotiating a better deal with your franchisor. Can they reduce the fees? Can they help with financing?

There have been many businesses which started up during tough economic times. Hewlett Packard, Microsoft and Hyatt are some big ones, Coffee news and Candy Bouquet are some smaller ones, but you get the point. It has been done many times before and it can be done again during this crisis. What about reduced business activity? Don’t worry… services will continue at about the same pace, fast food businesses may see an increase and the remainder may well have a quieter time than they would like, but this is a good time to settle into your new business, iron out the wrinkles and position yourself for when the good times return!

In late 2007, I purchased an existing franchise bookstore whose revenues had dropped by about 30 percent during the previous four years. The owner and his wife were genuine sellers, having already relocated to another part of the state where they were to care for a seriously-ill relative.

I was confident that I could restore its glory. After all, I had doubled the membership, revenues, and staff numbers of a real estate industry association just before buying the bookstore. I knew how to revitalize a business. Surely I could do the same for the bookstore, right?

Well, yes, or at least a qualified yes. Revenues are now approaching their former highs as a result of some very long hours and the implementation of some innovative marketing strategies. Yet, for all this, I haven’t realized significant profits to show for this effort and these outcomes.

Why not? Because, in the case of books, and probably for a heap of other products, the economics of the business model work against the creation of lucrative outcomes. I was reminded of this by an insightful quote in the wonderful book, The Guernsey Literary and Potato Peel Pie Society by Mary Ann Shaffer,

“I love seeing the bookshops and meeting the booksellers-booksellers really are a special breed. No one in their right mind would take up working in a bookstore for the wages, and no one in their right mind would want to own one-the margin of profit is too small. So, it has to be a love of readers and reading that makes them do it-along with first goes at the new books.”

So, it’s a tough business. But we each have to work at a place we find interesting, feel enthusiasm for, and is within our span of knowledge and expertise, don’t we? For me, this had to be the world of books, particularly since I can’t fix or repair anything, am a dolt and a luddite when it comes to anything technical, and have had a love affair with books since my childhood. Added to that, I self-selected into a lower-risk, lower-returns industry by buying a bookstore rather than something newer and more glamorous.

Nonetheless, it seems to me that the vast majority of franchise business models are designed with the primary expectation that it is the franchisor who will benefit most. They pass most of the potential risks on to the franchisees, require the franchisees to undertake almost all of the “grunt” work of the business, and are not especially accountable to their franchisees except in an indirect, relatively weak manner.

Yes, they are required to monitor the health of their franchise networks, provide opportunities for franchisees to get together, and create marketing and logistics support for their franchisees, but these are arguably less onerous, less risky, and less committed tasks than those demanded of franchisees.

If it’s prosperity you seek, there are a few options you should consider. Otherwise, you will find yourself in the very large pile of mom-and-pop franchise owners who have bought themselves jobs but do not achieve the returns deserved from their labors.

First, you can get in early and buy a franchise in an industry or niche in its early to late growth phase rather than one in its late maturity like the book business. McDonald’s in the 1970s, Subway in the 1990, and fruit juices, salads, and sushi bars during this decade are all examples of this phenomena. Cast your creative minds toward the growth curves of the new wave of franchises. Perhaps there are businesses available that help people better manage the finances they have (or don’t have) that will be in real demand as the economy contracts. The fitness and health sectors are likely to continue to grow at impressive rates, while services for our aging baby boomer generation will undoubtedly mushroom during the years ahead. The earlier you are in, the more that you can take advantage of the above-average margins earned by those facing fewer direct competitors in the short to medium term, and the more that you can establish yourself and take advantage of further opportunities to purchase additional franchise stores or territories before the rest of the world learns about the money to be made there. Of course, there is a higher level of risk here, but higher rewards usually follow if the risks pay off.

Second, you can snap up existing franchises with low-ball offers that may be accepted, with a little luck, by those desperate to sell. In this way, you won’t find yourself taking years to pay back the goodwill that may or may not have been in the business you have just purchased. I definitely paid too much goodwill for my store, adding years of additional work to pay it down. In contrast, I know of one colleague who has recently added a second franchise to his existing store. His timing was great for both stores, and he paid little more than the value of the inventory he was acquiring. For him, there is a much greater potential upside than there is for me. Live and learn, right?

Third, you can scout around to see if there are any franchisors offering more of a win-win deal than those who cream off a flat rate of your revenues. In my view, a truly abundance-focused franchisor would take less of your hard-earned cash as you scale up, and then a higher percentage as you move beyond your break-even to increase your overall margins. I’m not sure if such franchisors exist, but if I was just starting out I would certainly check this out. If you have already decided on your industry, I would also closely examine, from every angle, the slice of your money taken by all of the existing franchisers in the industry before settling on any one. Don’t forget, 8 or 10 percent of your gross revenues may not seem like a lot, but when it is considered next to your bottom-line, you quickly realize that every dollar given to them is one that you won’t keep. It is a dollar you can’t use for local promotions, a dollar you can’t use to pay yourself a higher salary, and a dollar unavailable to pay down your business loan. You will never see that dollar again. Consider this fact very, very carefully and understand its serious implications for your business and your lifestyle before buying your franchise.

Finally, you can always take on some extra work outside your franchise or establish another business to help bring in some extra cash. This is not without its potential problems, however. Any time spent elsewhere may take your eyes off your most important asset, your core business, and thus compromise your most critical business outcomes. In addition, your franchiser may not look at your outside work in a benevolent way. Check the franchise agreement carefully and, if in doubt, discuss it with someone you trust in the franchiser’s organization before moving outside the business.

If you are going to go the extra mile to make your new franchise a success, think very carefully about your expectations for the bottom-line. If they are unrealistic and inconsistent with the likely profit flows from your business, you may quickly jeopardize your own morale and that of your people, sending the business into a downward spiral. With some solid homework, however, you will enter and run the business with a healthier business philosophy and with more realistic expectations for its results.

For many considering investing in a franchise business, this decision is one of the most financially significant investments of their life. While most prospective franchisees understand the importance of prior research and substantial investigation into the company they are considering buying a franchise business from, they’re not always quite sure what to look for. It’s quite common that those with the best intentions end up making ill-informed decisions. Here is a comprehensive guide that any prospecting franchisee should make sure to know and understand.

First, the Uniform Franchise Offering Circular (UFOC) is a document distributed (by law) to serious potential franchise business buyers. This document contains detailed financial information (including history and current standing) of the company, conditions and fees that the potential buyer can expect, information on legal proceedings and trademark information and what contractual restriction each side is bound to.

The philosopher Voltaire was the first to say “Common sense isn’t all that common,” and this can certainly pertain to this next topic. One would assume that the next intuitive step would be to seek out and speak to people in the business who have gone through the same exact process, who can provide a wealth of information. Most people skip this crucial step, perhaps not wanting to “bother” anyone. This step is critical and cannot be overlooked! The best way to learn about the workings of a franchise business is to speak to other franchise owners. In the UFOC, the franchisor provides the prospective buyer with a list of existing owners. Make sure that you speak to a few owners in order to gain a clear picture and not be led solely by one person’s experience. This information is naturally subjective but if you come with specific questions, you are sure to leave with a lot of answered questions that will help you in your decision.

Another great way to learn about a franchise business is by gaining access to government or other third party information (sure as the Better Business Bureau). These sources will help you discover if there have been any complains launched against the company and if the franchisor has successfully complied with state registration requirements (14 states regulate the sale of franchises). This information will save you time and money and you will feel more secure in your investment and more prepared for what lies ahead.

The dog may as well have eaten it, for it wasn’t worth much. My preparation for buying a franchise wasn’t even close the quality of what yours must be if you are going to make a sound buying decisions.

Let’s consider some of my mistakes.

Most significantly, I was far too driven by emotion, passion and impatience. I had recently concluded a term full of part-time university teaching and when the phone stopped ringing my nervousness about the future took over. As I sat at my home computer in August 2007, I thought, “why not buy a bookstore?” and proceeded to go to the website of the chain from which I bought most of my books to view the opportunities. Since there were three existing franchises for sale, they were the three I examined. Since I couldn’t afford the start-up costs of a new store, I didn’t consider any other options for establishing a store. At the very least, I should have looked at what other franchisors were offering. I didn’t.

Of the three stores, only one was within my price range. While performing poorly, it looked like it would not be falling over any time soon, whoever was the owner. It was probably operating around its break-even revenues, thus offering a lower level of risk than one of the other stores, then struggling against huge local competition. It didn’t open Sundays, thus appealing to my sense of family, and contained a low level of inventory, therefore reducing my required levels of borrowing.

Having said that, it seemed to be providing the existing owner with a basic salary but little more. I knew that I could turn make it run as well as it had in years past, however I missed some critical information that I should have noticed. First, the owner’s partner had been employed full-time in the store yet was only being paid the equivalent of a couple of days a week. With my wife teaching part-time and looking after the kids otherwise, this was a salary expense I had not foreseen and would need to incur.

Second, the previous owner’s borrowings were much lower than mine, so his loan servicing expenses didn’t impact on the bottom line as much as mine did. While my accountant was competent, I should have sought advice from a financial adviser with more experience in small business generally and franchises in particular.

Third, given all of the above, I should have offered far less to buy the business than I did. While the existing owner dropped his price by about 30 percent, making me feel that I was a negotiating king, the reality was that the business was worth significantly less than I paid. The owner was pretty desperate to sell, there were no other serious buyers in the market, and I was too enthusiastic about showing my hand as a potential buyer to later have the negotiating power that I might have.

Finally, it turned out that the timing of my purchase was abysmal, at least in some respects. During September 2007, I left Australia for two months of teaching at a university in rural China. As I departed, I had decided against the idea of buying my favored franchise. The money was just not in it and something told me that it may never be. Nonetheless, on arriving in Shanghai en route to a central province, I received updated financials from the existing owner that gave me a little more hope. After another few days of reflection, no doubt encouraged by the fact that I was in the middle of nowhere and wondering about the state of my career, I took the plunge and bought the business.

All well and good, you might say, except that negotiating a price, completing the franchise documents, and filling in the never-ending pile of supplier credit forms was perhaps best undertaken from home rather than the middle of nowhere. Worse still was organizing a bank loan to buy the business. I had no previous record of business borrowings so had to start from scratch. Worse, my bank manager was out of the office far more often than she was in it. Tracking her down made for a ridiculous number of calls. What hurt the most, however, was that on my return, a Director of the franchisor asked me if I had used their preferred bank, since that bank had set up fast-track procedures for new franchisees and, better still, enabled the new franchisee to borrow against the value of the business rather than against their residence! If I’d known that at the time, much stress and heartache down the track could have been avoided.

While I still feel that the franchisor could have done a much better job of assisting me, the responsibility, when all is said and done, was mine, as it is yours if you are passionate about buying the right franchise at the right price in the right location. Carry out as much as the due diligence as you can yourself and, where you don’t have the skills, bring in others to better work through the critical processes that will undoubtedly have significant bottom-line impacts for your business over the long haul.

Location. Location. Location. It’s true. Location is the most critical factor in the success or failure of any new franchise business, and almost every other business, for that matter.

Some franchisors have locations already available for the consideration of potential franchisees. Some facilitate the purchase of existing outlets in established locations from franchisees looking to sell. Others may leave the choice of location entirely up to you, although they will normally keep a watching eye on your choice.

When I returned from teaching an MBA class in New Venture Creation at Utah State University in 2001, I explored franchise ownership for the first time. I had enjoyed teaching about franchising and had enjoyed excellent customer experiences at franchises such as Subway, Cold Stone Creamery, and Boston Market. At the time, none of these brands were established in Australia in any meaningful way.

Thus, soon after our return, I attended a Subway meeting for potential franchisees held at south-western Sydney. After Subway’s Regional Manager informed us that franchisees must first select their own location, I discussed with him two possibilities I then had in mind. To the first, he said that the site, a shopping centre under construction, was already taken by a new franchisee. My second suggestion was a regional shopping centre then several years away from development. Unfortunately, it too was taken, this time by an existing franchisee in a nearby area. Since I had no other good alternatives, I let the idea drop for a time.

I got back on the franchise horse via the purchase of an existing bookstore franchise in late 2007. Fronting a pedestrian plaza in the middle of a regional business district, I confirmed the value of its location by sitting out front of the store and counting customers as they entered and left one afternoon. I counted both buyers and browsers for about 20 minutes. The numbers looked good.

Looking back, they were good, but perhaps not as good as I had first hoped. Why? Because I had observed the store during that time of day when it was, by far, at its busiest. It was lunchtime, and I have learnt since then weekday lunchtimes, from noon until around 2:00pm, can account for 70 percent or more of the day’s takings.

Therefore, while the store continues to perform well, it would work a whole lot better if the lunchtime crowd was representative of customer flows and revenues across the entire day. It’s not, and that’s life.

At another time in the recent past, I created two temporary retail stores at other locations, taking advantage of the busy pre-Christmas period to sell as much as I could in as short a time as possible. The first was again at a place disproportionately favored by the lunchtime crowd, however the rent and overheads were sufficiently low to make the economics of the store work in my favor. It did pretty well.

The second store was much larger, something all retailers would normally see as a huge positive, however the building itself was isolated from the main center of a regional shopping mall. While it received plenty of passing automobile traffic as they entered and left the car park, the effort required for shoppers to actually come across to the building worked against its success. While I didn’t lose money on the deal, I had paid a much higher rental for the site in the hope that the additional space would mean higher sales. I was wrong. It was not nearly the goldmine I had hoped it would be. Ironically, the building had formerly been a Boston Market, a franchise that didn’t last long in Australia since it didn’t catch on. Perhaps I should have learnt from their failure at the site some years before.

The other day, a friendly supplier gave me a great piece of advice. He said that the target for any new retail store should be an average of 15 people walking past the location every minute. While I suspect that many stores may still succeed with fewer pedestrians than this, it is a great “rule of thumb” against which we can evaluate any locations we are seriously considering.

This is the kind of research that only you can undertake. Franchisers will cover themselves in legalese to ensure that they are not held accountable for any preliminary estimates of customer numbers and turnover. The owners of shopping malls will do the same. This is a job for you.

Learn from my mistake. If it is an existing site, survey the traffic flows at various times of the day and at different days of the week. If you are thinking about an entirely new site, find comparison shopping centers and malls that have similar demographics to yours and a similar mix of tenants and make counts of the shoppers walking in and by stores like yours. You will need to allow for the fact that the center may have grown its traffic over time, whereas a new mall will take time to pull a crowd, particularly in today’s challenging retail environment.

If you get it right, however, a great location will ensure that your franchise business is a true boomer rather than a business which is here today and gone tomorrow.

When you have a successful business, you may feel that you could benefit by opening another store at a different location. If you do not feel that you can stretch yourself that thin, the answer is simple consider opening a franchise. Sell your idea to someone else. You still have a certain amount of control, because you control the suppliers, you control the pricing and you even control the floor plan. The only thing you are doing is to putting in a manager, who is paying you a lot of money to get a larger cut of the profits. They definitely can make a lot of money, but so do you.

Make a list of everything that you are going to keep under your control, and if there are things that you want the buyer to be responsible, such as upkeep of the building, list them too. Be sure to include what you require to approve the franchise and what may prompt you to cancel the franchise. Contact your suppliers and be sure that they will be able to handle the increased business. If they cannot, you will need to consider other companies who can handle the demand, all of your items have to be the same. And if you have a food product, they all need to be of the same taste and quality. It is like baking gingerbread man cookies, you are using the same cookie cutter on the entire batch, and in business you are using the same plans and products for all of the stores.

Place ads in papers, magazines and on your business website, to let people know you are ready to share your business, that you are opening a franchise.

Every single year, millions of people will begin their own small businesses. The majority of them will be building it around an idea they have thought up, or one that they have kept in the back of their minds for years. Of these millions, a great many will succeed, and see their businesses or companies grow into an empire. However, many more will fail miserably, either because they just didn’t have a good idea to start with, or because they did not have the know-how or the funding to properly advertise and sell their services or products.

Let’s say that you always wanted to start a business, but you either didn’t know what you wanted it to be build around, or you just didn’t have the funding or technical know-how required. Why should you give up on your dream just because you do not have all of the tools you need to succeed? You shouldn’t! That’s why opening a franchise could be a fabulous opportunity for you. Franchising offers you a way to own a piece of a business that already has known success, and would be able to be successful in your location. Company owners will research your area, and will not give you the franchising rights unless they believe it will work in your town. They also make sure that there is a proper space between their franchises, so that one does not take too much business away from another.

All you have to do is fill out the application, and if it is accepted, you can begin your franchise. All of the tools, training and advertising are provided for you, guaranteeing that you will be successful.

Telling someone how to find the best franchise for her is kind of like telling someone how to find the best clothing: so you figure out what size you are and what you like, and then find the clothes that match you best. It really is kind of straightforward, and it’s so person-specific, that it’s difficult to make an overarching generalization without sounding rather foolish. So, at risk of sounding rather foolish, there is at least one generalization that can be applied to most moms that will help in deciding what the best education franchise to go with is: the age of your children.

As everyone knows, children grow, and at each developmental stage, something different is required of mom, which in turn means that there are also different freedoms for mom and therefore different opportunities for work. For the most part, those different age groups and needs can be broken up into three distinct categories, which we’ll call pre-preschool, K-12, and post-high-school. And at each of these specific stages, mom is free for a different brand of education franchise.

Pre-preschool This is that period in a mom’s life when the only time the baby leaves the house is either when mom and dad take him somewhere or he’s staying at grandma’s so that mom and dad don’t have to take him somewhere; it’s basically the four or five years before he’s enrolled in school. It’s during this span of time that the average mom is bound to her child night and day, seven days a week, which, for the working mom, makes any work outside of the home a near nightmare. Conversely though, the constant naps and Sesame Street breaks give mom numerous opportunities to cram in a bit of work from home each day, making home-based business opportunities a brilliant option.

Two good choices to consider for the mom with a flair for education are Club-Z In-Home Tutoring and Team Marketing Systems. First, Club-Z In-Home Tutoring franchise opportunities give franchisees the know-how and resources to provide first-class in-home tutoring to students of all ages without actually having to go out and do the tutoring themselves. Entirely from home, franchisees connect students in need of tutoring with professional tutors trained in a variety of fields; they are the bridge, not the ground troops, which fits in perfectly for stay-at-home moms keeping busy while junior is napping. Similarly, Team Marketing Systems franchisees also work from home, but in this case, they serve a slightly older crowd, helping high school sports teams and clubs maximize fundraiser revenues to build their schools and organizations. Either of these franchises are perfect for the mom with sleeping little ones.

K-12 The next segment of a child’s life (at least for our quick-overview purposes) lasts a good, long while and is best marked by the seven hours that mom suddenly has apart from her kids, from 8am to 3pm (or somewhere around there). This stage opens up a whole new list of business opportunities for the working mom, as she finds herself without anyone to take care of for half her day. One great education franchise that would adequately fill this time and not cost any of the precious evening time with her own kids is Computer Explorers. Built for the express purpose of exposing children to computers at an early age to give them every possible advantage for the future, Computer Explorers visits schools and other similar organizations with traveling computer equipment, which means that work hours are precisely the same hours that children (specifically any working mom’s children) are busy at school. It’s a perfect fit.

Post-High-School This particular title is a little bit deceiving, because though the name sounds as though it’s only the period after a child is out of high school, for all intents and purposes it begins somewhere in the midst of the high school years. It really is the time during which a teenager has little to no interest in his parents and is more concerned in his own affairs. This is a hard time for the average mom, but if she’s aware of it, it also affords her some further freedom.

Since she may no longer be needed each afternoon for play time and each evening for dinner (depending on the individual child and family, of course) mom has some more free time for educational work that requires some evening and weekend hours. One great opportunity is 911 Driving School. What greater alternative is there to teaching other people’s teens to drive a car. If not the hours, the great perk to this franchise is its unorthodox nature: there really aren’t too many people who can honestly say that they teach people to drive for a living, a good franchisee could single-handedly clean up the streets.

If not teaching kids to drive, then perhaps teaching kids to act is more your thing. With those free evening hours, Drama Kids International is an excellent business opportunity. Founded on the notion that kids can be taught public speaking skills and personal confidence through drama, this franchise gives a creative outlet to both children and the women who direct the program.

Oversimplified This quick rundown is precisely that: oversimplified. Without speaking to women on an individual basis, there really is no way to determine exactly the right franchise for anyone. And to give the honor due to mothers reading this, not everyone is going to have exactly the same family going through each of these trends just the way I’ve described them, but hopefully these business alternatives have spurred your imagination to consider what might appropriately fit your family, your kids, and your timetable. After all, fitting your particular situation is what you need to do, because for any good mom, your kids come first.

What will the new year bring for franchise growth?

Talk about getting started on the wrong foot! Could everyone in the United States be in a more cautious and precarious situation then right now in the days soon after New Years 2009? Most people are still asking, “What just hit us?” as they try to collect themselves both financially and emotionally from a devastating 2008 where over 3 trillion dollars of wealth was lost throughout the year. My guess would be that my Holiday was similar to a lot of other professionals in the United States, less presents under the tree and much less extravagant all around.

So what does 2009 bode for franchising? How will franchising respond to the inclement financial times and what is sure to be an interesting road to recovery for the U.S. economy this coming year?

In my opinion, 2009 will be a good year for franchising and for many entrepreneurs getting started in their own franchised businesses. Here are the reasons.

1. There are no corporate jobs out there right now. Almost all of the large corporations in America save a few niche industries have made enormous cutbacks in their labor forces. When college educated professionals were coming out of school into the job market 3 years ago, those $100k jobs were plentiful and offered a very nice alternative for new workers. In the 2009 market finding a good job anywhere will be like winning a car from the monopoly game at McDonald’s, not that likely. Franchises offer a valid alternative for those either newly out of school or looking for new opportunities. The absence of work opportunities will make franchise offers that much more attractive.

2. Real Estate Opportunities. Commercial Real Estate prices are at all time lows per square foot in most U.S. markets. When times are good and the Starbucks of the world are dishing out rents at $100 per square foot in Dekalb, Illinois, its impossible for the “little guys” to keep up. Today, if you have been living in a cave and haven’t heard, Starbucks is closing 700 locations as well as many other major corporate chains. This leaves ample opportunities for smaller, emerging chains in many different business categories.

3. The Flock Mentality. Most people are pretty depressed right now. People tend to base their decisions on what others around them are doing or saying. Because of this mentality many of the “pretenders” in any given industry will not be participating in 2009 to the extent they would be when the economy is booming. Looking at the investment community, the really successful investors make opposite moves of the general public. During this massive sell-off in stocks during the second half of 2009, Warren Buffett invested over $20 Billion. The franchise companies that make aggressive expansion moves in 2009 will take market share from their competitors and be in extremely good positions when the economy comes out of this slump.

With the increasing numbers of unemployed workers in the United States franchisers have a growing audience and number of potential franchisees. As more and more creative finance tools are uncovered and the federal reserve does everything in its power to loosen the financial markets, the access to capital will begin to come easier. This combination stands to fuel franchise growth at unprecedented levels in 2009 and beyond.

When opening a franchise, there are certain questions that you need to ask yourself. It is very important that you ask yourself these questions because this is what puts everything into perspective for you. It is these questions that will help you determine whether or not you are a real success at what you are hoping to do with your life.

Those questions are:

• Do I need work that provides me with intellectual stimulation? Some franchise businesses require very little education, which means there may be very little stimulation. Some people are just wired to have to have a lot of stimulation.

• What other priorities are in my life? When opening a franchise, all of your working time is devoted to that franchise. You may find that you’ll become quite frustrated if there are other activities that you want to do on the side.

• How are you when dealing with the public? Owning a franchise involves dealing with the public. You have to know how to deal with them in order to be successful.

• What is your likelihood of entering the world of work again? If something happens that your franchise doesn’t succeed the way you want it to, you must evaluate how easily you can enter the work world again.

• What are the costs? Legal fees, rent, utilities, and security systems are things that you have to take into consideration when considering the cost of a franchise.

You should have answers to all of these questions in order to help you make a decision regarding whether or not to enter into the franchise business. If you are already there, then you still need to evaluate these things to make your business a success.

Opening a franchise may seem a lot harder than what it really is. As long as you have some business sense, you shouldn’t have a problem. Perhaps if more individuals would realize that they can open a franchise if they have the money, there would be a lot more businesses in operation.

So if you have been thinking about a franchise, what is holding you back?

Well, the first thing you need to do is find yourself a franchise to open. Find something that no one else has in your area, but you have to make sure that you enjoy it. You don’t want to open something that no one else has just because no one else has it. You have to love it too.

You also need to have a plan in place. Finding a franchise should actually be a part of that plan because you have money you have to deal with. If you don’t have the funding to pay straight out of your pocket, there are loans available to help you get your franchise off the ground.

Then there is the fact that you have to figure out if you want to keep the brand name or if you want to give your franchise a different name. Fortunately, you have that flexibility. Just keep in mind that the Federal Trade Commission governs franchises, so you have to remain within the confines of their law.

Other than that, you should have no problems. If money or other factors are the reasons why you haven’t started your franchise, throw all of that out the window and get moving because it is a lot easier than you think it is.

People often ask me about franchise brokers. On the surface, the idea of a broker seems simple enough. Brokers put buyers and sellers together so whether a buyer or a seller, brokers would seem to be a very important component in the equation.The fact is, they get paid to put buyers and sellers together. After all, they need to get paid too.

Thus, by the pure nature of that relationship, they typically have a biased opinion. Odds are, they are representing a party that pays them upon procurement of a sale. So, let us look at this from both perspectives, the franchisor and prospective franchisee. For some franchisors – Brokers fill a void as a nice additional franchise sales outlet, but do not make the mistake in thinking that brokers are going to be your only source of sales for your expanding company.

We have found that companies that sell their own franchises have the greatest success in the long run. The reason for this is that a company selling their own territories has to live with them for the term of the contract. This causes in house sales teams to have more stringent criteria placed on them. Thus, my advice is to first deploy an in-house sales initiative. In order to be successful with an in-house sales force, they will need to deploy a marketing program in order to generate leads for those sales people to follow up with.

This strategy needs to address the following marketing opportunities:

1. Internet
2. Trade Shows
3. PR / Publicity
4. Print
5. Direct mail

We believe that this multi-pronged approach is the best way to address sales and marketing. As a secondary plan, brokers can add additional prospects to the equation. Though, be weary of deploying a marketing program and sending all of your leads to outside brokers.I would not recommend that strategy. Your leads are then likely to be distributed among that brokers other franchisor clients in the event that they have a qualified prospect that is not interested in your particular business off hand.

My advice would be to only use brokers that generate their own leads. In addition, be careful not to enter into an exclusive broker arrangement. For those of you that are prospective franchisees, be weary of brokers steering you to a particular business in which they are obtaining a commission. Not all franchise companies pay commissions.

What happens if you work with a broker and they do not show you a particular franchise that you are interested in learning more about? GO DIRECTLY TO THAT COMPANY. There are many brokers that are great people and and help people find their dream business. Though, brokers are not for everyone. I am not aware of any large national brokerage networks that are paid directly by the buyer. All of the brokers that I have met are paid by the actual franchise companies upon the sale of a franchise.

In a perfect world, you perspective buyers should work with a broker for a fee that you pay so that your interests are being represented, not those of a hand full of franchisors. Now you sellers and prospective buyers are in a better informed position to be able to find the right opportunities that are out there for you all.

In light of the current economic climate, small business startups need every possible advantage available to them in order to have a shot at succeeding. Most experts agree that when recession is in full force, the name of the game for businesses small and large is survival; do whatever it takes to make it through the lean times and if you do, you’ll be stronger for having gone through the tough times and ready to take on a larger client base and make some serious money when the economy turns upward. Although franchise businesses (and work from home franchises in particular) are insulated from the recession, every business is still feeling the pinch, which may cause some discouragement to anyone thinking of starting a new business right now. The fact remains, however, that while some of the largest corporations in America are facing their hardest times ever (such as auto makers), a shrewd businessperson with the right work at home small business can not only survive in tough economic times, but has the potential to profit in nearly any climate.

The insulation provided by franchises comes in the form of a strong business plan, name recognition and a product that has been tested and proven over time. Franchises have shown to outlast traditional small business startups, with numbers as high as 96% of all franchises still in operation after the 5 year mark (according to the IFA). To help bolster your chances, if you’re a work at home mom or a stay at home dad, you will have significantly less overhead when it comes to your home based business.

This is due mainly to the fact that work at home businesses don’t require leased office or retail space or a sizable staff of employees. Sure, there are no guarantees in life, and some economists would say that you’re taking your life in your hands trying to start a new business right now, but the fact of the matter is that it is possible to succeed and many of the only businesses that have reported growth during this recession have been franchises (fast food, entertainment, etc). If you’re a work from home mom and have been considering a franchise business for sale, here’s some questions to ask yourself to get you going in the right direction and to see if you have what it takes to survive in small business, even in tough economic times.

Do You Have The Support Of Friends, Family and Mentors?

When you start any major endeavor in life, having the support of the people that you trust and care about is of utmost importance. Not only will this help you to have peace and encouragement when times get tough, but it will also give you a good third-person perspective on the major decisions you are about to make. Additionally, it will hopefully give you a good idea whether or not you’re making a good long-term decision for you and your family. Say for example you start a work at home franchise with Blue Coast Financial Group, a low-cost financial franchise which provides a slough of business to business financial services. When the economy is up and business is booming, you won’t find much criticism from anyone, but if your business should go through a dry season where you have difficulty securing clients, you need to have family, friends and mentors on your side to help encourage you and pull you along through the tough times.

Are You Comfortable With Risk?

Starting a small business isn’t the same as taking your life savings, heading down to the casino and plopping it all down on the roulette table, but there is still going to be an inevitable amount of risk involved. Many times, business owners will have to put up their homes as collateral for a loan, or dip into to their savings for startup costs or to “float” the business during lean months. Many of these moves will often turn out well and as the old saying goes, “no risk, no reward.” However, if you’re the type of person who will be up all night and have a stress-induced ulcer within a month due to the risks involved in your small business, you will want to either have a business will a very small startup cost, such as The Glove Lady which specializes in specialty gloves and safety products to the commercial and corporate marketplace, or consider bringing in a partner who will handle the risk management while you handle running the actual business.

Do You Love Your Community?

This may seem like an odd question to ask when discussing a small business, and particularly one that will be run out of the comfort of your own home, but it’s still important to consider. The hardest time, statistically, for a new business is the first two years, and the main reason is that it takes a while for people to know your business, start to use your services, spread the name of your business through word of mouth and for you as a business owner to really hit your stride and get the business running like a well-oiled machine.

With a CompuChild franchise, for example, you will run many aspects of the business from home, but the bread and butter of this work from home business is going into pre-schools, private schools, public schools and day-cares to teach young children essential computer skills. While this business model has been tested and proven and could be taken to nearly any town, it will severely jeopardize your business success if after a few years of building relationships with key players at local schools, you up and move to a different town and have to start all over. Many franchises as well will sell you a specific territory when you purchase a franchise, so moving too far away may mean that you would have to sell the franchise and re-purchase it in your new area. All this to say, make sure that you’re willing to commit to the community you live in, because the success of your business will greatly depend on you sticking around and planting roots.

No business is a guaranteed success, and it would be foolish for a franchise to make such promises, but the facts show that starting a work from home franchise is one of your best chances for success, in nearly any economic climate. Feel free to get more information on any of the franchises mentioned above, or any of the many other women’s franchises and work at home businesses available. Remember that the biggest factor in the success of your small business will be your drive, motivation and willingness to hang-in-there when times do get tough.

Stepping out and taking hold of a business opportunity as a franchise owner is never a comfortable task. No matter how excited a person can be about the prospect of owning his own business, there is always some degree of trepidation at what all it is actually going to entail. Particularly if you’ve never purchased a franchise business before, there are certain aspects of purchase and operation that should rightfully draw some questions from you, not the least of which being the price.

Unfortunately though, pricing on franchises is not a simple matter. For starters, there is a huge cost discrepancy between the initial costs of high-end and low-end franchises. Then, depending on what a given franchise actually does, there are different kinds of costs that can apply to one kind of business and not another. Because that’s a rather vague overview of the confusions surrounding the purchase price of a franchise, the following is a piece-by-piece analysis of what costs exist and what costs to look out for when buying a franchise.

Upfront Expenses

When the average newcomer to franchising approaches a purchase and asks how much a franchise costs, this is most likely what he’s asking about: the amount of money it’s going to cost him just to start. This is broken down into three primary parts of the cost: the franchise fee, startup costs, and available funds.

The franchise fee is conceivably the most straightforward aspect of the whole transaction. It’s the fee you pay to gain the rights to use the name, logo, and business model of the franchise. Generally, this number hovers in the range of $10,000-$50,000, depending on the franchisor.

Startup costs have the most variance among the three parts of the initial cost of a franchise: ranging anywhere from $1000 or less up to millions, depending on the kind of business opportunity in question. Low cost franchises like American Business Systems, a home business providing cheap and efficient medical billing services, can cost as low as a few thousand dollars to get underway, simply because there is no store to build, no inventory to buy, and little equipment necessary. Home businesses, consultancies, vending operations, and web-based businesses all tend to fall on this cheaper end of the spectrum. On the other end of the gamut, high capital franchises like STAR KIDS Early Learning Center can carry a startup cost upwards of $3mil to cover the cost of site selection and purchase, construction, employee hiring, training, and tons of equipment. Other businesses that fall into this high price range are hotels and fast food restaurants, with auto repair and retail establishments following not too far behind. Other costs included in the startup operational expenses are often professional fees, insurance costs, and the cost of any necessary operating licenses.

Finally, the third piece of the initial cost of a franchise is the franchisee’s available funds for working capital. Some franchisors require that a new buyer have a certain amount of available cash on hand to ensure that the business has something to fall back on if it isn’t quite as instantly successful as hoped. This amount may be enough to keep the business running for just 3 months or as much as 3 years, depending on what the franchisor requires.

Ongoing Expenses

Something never to forget is the ongoing cost of operating a business, because spending doesn’t stop when the front doors open, rather it’s just begun. So when you purchase a franchise, be sure to calculate in all that you’re likely to be paying throughout the life of your new operation.

First, there are still fees to pay to the franchisor after you become a franchisee. The most common is a royalty fee, which is generally a percentage of franchise’s earnings, somewhere around 6%. However, not all franchises charge on ongoing royalty, like Candy Bouquet, the creative retailer of candy gifts which has no royalty fees to pay, so it’s important to ask whether or not the business that you’re interested in does.

Sometimes, the franchisor charges an ongoing advertising fee as well, to help afford a pre-existent and ongoing local and national advertising campaign. If this is an included fee, it can be collected either independently or as part of the general royalty fees, so whether you see a listed advertising cost or not, it’s important to ask if there is one and what it costs.

Aside from regular fees owed to the company, there are also plenty of ongoing expenses that are natural to any kind of business, franchise or not. Some of those basic expenditures cover things like inventory, equipment, rent, décor, equipment and store maintenance, payroll, employee benefits, and various types of insurance. Most of these generally don’t pertain to home based business, but in any operation with a storefront, such costs are to be expected and entirely necessary. If your franchisor, or perhaps another franchisee, can give you an estimate on monthly expenses, it will go a long way in helping you determine which franchise is best for you.

Counting the Cost

Whether you’re interested in a work from home opportunity or a full-service hotel, knowing what you’re going to be paying at the beginning is important to the success of your business and to your personal peace of mind. Do all your research, pose all pertinent questions, and don’t get reeled in by fine-sounding rhetoric; know what you want and what you want to spend for it, and then stick to it.

Have you ever driven through a town that has something like 5 McDonald’s restaurants in it? You probably thought, “Wow, these people really like McDonald’s.” The truth, though, is that you may have corporate owned McDonald’s restaurants and those within a franchise. There is probably a chance that only one or two of those are corporate and the rest are franchise stores. The problem with this is that the franchise owners are probably not making the money they hoped to make because of the number of stores in the area.

This is why that it is important to check the competition first.

If you are thinking about opening a franchise, you have to scope out the area and make sure you’re not opening something that already exists. When you open a store that already exists, you are seriously compromising your profits. People have a tendency to go to their usual restaurant before they will go to the new one of the same kind. They’ll go to the new one when their old one does them wrong in some way. They may even go to the new one during its grand opening, but that is about it.

So make sure you scope out the different franchises before deciding to buy one particular franchise. Opening a franchise should be an excellent career move and not one that is going to pull the rug out from underneath you. When you research, you will find out what you can open and what you can’t and how you will succeed with each one. You’ll also be the one to bring in the profits.

Are you growing tired of driving back and forth to the same boring job? Perhaps, you’re feeling stuck in a rut with no chance of a promotion or raise in sight? If you wish you could gain more flexibility, become your own boss and maximise your earning potential, there may be a way. There is an opportunity that can enable you to spend more time with your friends and family, say goodbye to long commutes and earn more money than you ever dreamed possible.

Does this sound interesting to you? If so, you should consider franchising as a career alternative. There are thousands of possible franchise opportunities in every field. You will find companies that sell every product and service you could possibly imagine. Hence, you’re sure to find a franchise that suits your interests. It’s never too late to pursue a career you truly enjoy. You most likely spend many hours every week working so you may as well enjoy what you do!

Find a Franchise That Interests You

This may sound like very obvious advice, but you would be surprised how many people jump at the first available franchise opportunity. They may be in a rush to change careers or become too focused on the prospective earning potential, rather than the actual business itself. This is a common mistake that can be easily avoided. Take some time to investigate many of the available franchises for sale. You can search online, browse your local paper or join an online forum. We suggest you read our article, Finding a Franchise to Buy for more valuable suggestions on where to begin your search.

Investigate the Company’s Reputation

Like any business opportunity, you will encounter some honest and successful franchises, as well as some dishonest or fraudulent companies. This is why it’s so important that you take the necessary time to research a franchise before you purchase it. You will most likely be devoting a lot of your time, money and energy into running your business. Hence, you don’t want to end up failing merely because you chose the wrong franchise opportunity.

Talk to family and friends and post questions online to other franchise owners to find out other people’s experiences with the company. I also recommend consulting with your local consumer protection agency. Almost every country provides this service, and these agencies can offer you invaluable feedback about a prospective franchise. Spending a little time upfront can save you a lot of money and frustration later on down the road. You can avoid making the same mistake as many other new business owners, and discover an honest and successful franchise company to join!

Ensure the Franchise Offers Adequate Support

The level of support and involvement of a franchiser varies greatly depending on the company. This is why you should ask a lot of questions before you enter into any type of franchise agreement. As a franchisee, you will rely on the franchiser in many areas such as accounting, marketing or hiring employees. You may even require assistance purchasing the proper inventory and equipment so don’t make any assumptions. Find out how actively involved your franchiser will be when it comes to running your business. You want to ensure you’ll receive the necessary support to make your business a success!

Don’t delay in pursuing the career of your dreams. Spend some time considering your interests. Then look for a reliable franchise opportunity that not only interests you, but will also provide you with the necessary support to succeed. You’ll experience genuine satisfaction and enjoy a career you truly enjoy.

The decision to start a franchise should not be taken lightly, but it can prove to be very financially and emotionally rewarding. I’m going to discuss some of the steps you should consider to ensure your franchise succeeds.

Step 1: Understand What a Franchise Is

Before you begin, you need to understand the meaning of the word franchise. The term signifies a legal arrangement in which one party called the franchisor grants the rights to market products or services using the trademark of their business to an individual or group of people called the franchisee. The franchisee can then market the products or services using the methods specified by the franchiser. In return, the franchisee must pay the franchiser specified royalties and fees to use these rights. Rather than an actual business or industry, franchising is a method businesses use to market and distribute their products or services. Both parties share an interest in ensuring the company succeeds.

Step 2: Review the Benefits of Franchising

Another step before you actually decide to franchise your business is to list all the advantages. Consider that you will be able to expand much more quickly and less expensively by franchising. Another advantage is the fact that the more franchises that exist, the greater your purchasing power. If you are considering purchase a franchise, you can fulfil your dream of becoming self-employed and start running your business more quickly. As a franchisee, you will normally gain valuable ongoing support, training and advice from the franchiser. Raising finance to purchase a franchise is also much easier than raising the money to start your own business.

Step 3: Consider the Disadvantages of Franchising

Like any business venture, starting a franchise has its disadvantages. As a franchiser, you will lose a significant amount of control over your business. As a franchisee, you will lose creative freedom as you need to follow the requirements established by the franchise owner. You also have to pay a certain percentage of your profits to the franchiser.

Step 4: Requirements to Set Up a Franchise

You need to investigate the particular requirements to start a franchise in your country. The legal requirements vary greatly, depending on where you live. For example, the British Franchise Association requires that all franchisers possess at least one year of experience running a business before they can franchise. If you are a franchisee, you should consider a pilot operation that has an audited set of accounts. This makes it easier to evaluate if the business is going to be profitable.

Step 5: Intellectual Property Rights

At the beginning of the franchise agreement, the franchisee will obtain a package outlining all the intellectual property rights. It’s important to ensure that the franchiser’s rights are protected. The intellectual property may consist of a trademark, patent, registered design or copyright. The franchise agreement will specify exactly which licenses will be awarded to the franchisee and how they can be used.

Step 6: Operating Manuals

If you are planning to start a franchise, you need to obtain a detailed operating manual. This document will outline the essential information the franchiser has gathered while operating the pilot scheme. The manual will disclose any relevant information necessary to run the franchise successfully, including sales, reporting, equipment, marketing and accounting requirements. This document contains valuable information about the business. Hence, the franchise agreement will normally specify that the contents remain confidential and are never shared with any third parties.

Step 7: The Premises of the Franchise

You need to determine if the franchise you are planning to start is mobile or property-based. Some franchises may be run from your own home, whereas others are operated with customised vans. The location of the business may be crucial in the development of the franchise network. Hence, the franchiser may choose to retain control of the premises.

Step 8: Establishing a Franchise Agreement

If you are considering offering franchises, you have to prepare a franchise agreement. This document will permit the franchisee to run the business according to the specified legal obligation and intellectual property rights. The agreement must meet local law requirements, and it should protect the franchiser and present a workable document to the franchisee.

Step 9: Determining Franchise Fees

Before starting a franchise, you need to determine the fees involved. As a franchisee, you will be required to pay an initial fee to the franchiser for the privilege of joining the franchise network. Franchisees may also pay management fees, although they are sometimes included in the wholesale price of the product. Lastly, the franchiser usually receives ongoing royalty fees that represent a specified percentage of the profits.

Step 10: Understanding the Obligations of Both Parties

As a franchiser, you are obligated to provide support, training, a detailed operating manual and a franchise agreement to the franchisee. You also agree to promote the brand and to avoid competing by not granting other franchises in the same area.

As a franchisee, you must run the franchise business according to the guidelines established in the manual and the rights specified in the franchise agreement. You are responsible for keeping proper records, obtaining insurance, ensuring confidentiality, complying with intellectual property rights and maintaining the franchise premises.

Have you finally made the decision to expand your current business and purchase a franchise? If so, congratulations are in order for taking the first important step. Now, you are faced with another challenge – finding a suitable franchise to buy. There are many great franchise opportunities currently available if you know where to look. I’m going to give you some suggestions on where you can begin your search to find the franchise best for you!

Consider Your Interests

Before you actually begin to look for a suitable franchise, you should spend some time considering your particular interests. You need to find a business opportunity that reflects your personal goals, interests and beliefs. A successful salesperson is one who truly believes in the products or services that he or she sells!

You will find available franchise opportunities in almost any industry. Hence, the biggest problem will be deciding exactly which one to choose. There is no point purchasing a restaurant franchise if you have little interest in food. Likewise, investing in a fitness center franchise does not make much sense if you don’t enjoy working out or don’t believe in physical fitness.

You will find it much harder to sell products or services that don’t interest you; your prospective customers will be able to detect insincerity when it comes to sales. With a little time and effort, you can find a suitable franchise field to meet your needs. Once you have narrowed down the field or industry you wish to join, you can move on to the next step – finding an actual franchise.

Search for Business Websites

More businesses are advertising online so the Internet can be a great way to find a suitable franchise to buy. Start by conducting some online searches using large search engines such as MSN, Yahoo! and Google. You should also visit websites that are dedicated to helping people find available franchising opportunities. A great place to start is Be Business Smart. This company is dedicated to helping small businesses. Their site contains a useful Franchise Directory where you can search for available franchises for sale.

Many websites include a handy search tool that enables you to select a specific field or industry. This can save you time by restricting the search results to relevant franchise opportunities. There is an additional benefit – browsing by industry will provide you with new business ideas you may have never considered!

Visit Online Forums

Another great place to find available franchises to buy is online forums. Many sites contain business forums where professionals can network, advertise and support each other. Try searching for some online forums with members from your country or city. You may discover some exciting new franchising opportunities and gain some valuable advice in the process. Online business forums are also helpful for posting any business-related questions. You can find out if other individuals have experienced success with any prospective franchises you are planning to purchase. This can save you a lot of time, money and frustration before investing your money in an unsuccessful or disreputable franchise.

Consult Your Local Papers

Reading the classified ads of your local newspaper is another effective method of finding franchises to buy. Most papers will contain a business section that is devoted to listing available franchises for sale. Make it a point to review this section on a regular basis so you don’t miss out on any great franchise opportunities.

If you take the time to determine your particular interests, you will find it much easier to find a suitable franchise to buy. Search for business websites, visit online forums and frequently browse the classified section of your local papers. If you devote enough time and effort to your search, you’re sure to find the perfect franchise opportunity for you.

Happy searching!

While top branded franchise opportunities require very significant initial investment in the range of $300-400 thousand, there are many low investment franchises with initial capital range of as little as $1000 or even less. It is interesting though to note that majority of franchise opportunities require initial capital from $25,000 to $100,000, those with less initial capital would comprise on average only 10-15% of all franchises available.

As with low investment franchises the franchisee will probably not get from the franchisor largely recognizable and known brand there would be other things to consider when choosing the right opportunity. Besides necessary capital investment the following factors should be considered:

* will you enjoy that business?
* is there enough demand for the product or service in your area?
* how easy or complicated is the process of approving you as franchisee?
* how strong is the competition for the product or service?

In any case before applying for particular franchise the due diligence research should be performed. One should also not forget that as well as the future franchisee would like to choose the right opportunity, the franchisor would also expect to hand over part of his business even if it is small part of it to a best possible candidate. There for it would be good idea to make selection and apply for several opportunities in order to increase your chances to be accepted.

With development of Internet and e-commerce many Internet business opportunities are either directly listed as home based low investment franchises or could be well regarded as such judging by the required investment level and especially income potential. At the same time Internet opportunities while making it much easier to enter and to start can pose new challenges as well. After the necessity to learn about Internet technologies the biggest challenge is probably to learn how to deal with general public skepticism regarding Internet business. While everyone knows about huge amounts of money being flowing through Internet and almost everyone today buys product and services on-line, Internet business opportunities are usually regarded with special cautiousness. And there is good reason for that. While Internet really provides endless opportunities and there usually exist easy access to Internet based entrepreneurship, many people join opportunities being not prepared for business in general. And hence disappointments and failures. Internet opportunities require probably more accountability and responsibility than any other business opportunities, while also presenting most lucrative and fast growing businesses.

Both “brick and mortal” and Internet based business require serious approach and due research. Internet based business opportunities require more courage, but also give more possibilities for substantially improving earnings and life-style. There today no limits for somebody who is determined enough to personal success. There is so much useful information today freely available that the only challenge is to digest it without being overwhelmed.

The key to success in owning a franchise is finding a franchise that is not only reputable and honest, but is also the “right” fit for you. You need to do a thorough investigation of the franchise your going to buy, while at the same time they should be evaluating you to be sure you are a good fit for them.

Remember, we discussed in the previous articles how the franchise has to fit your goals, financial situation, personality, and management style, and so on. And, there has to be a demand for its products or services in your market. The right franchise should also have a proven established business system, which means that the franchisor should have a history of successful franchisees. You should ONLY consider franchise companies that have very few failures or closures, low franchisee turnover rates, and a good reputation with its franchisees.

How can you tell if a franchise company is sound, honest, and reputable? The best way do this once you have narrowed down your search to no more than two to three franchises is to make arrangements to speak with the company representatives, and also to call the current and former franchisees listed in the Uniform Franchise Offering Circular (UFOC).

Ask them detailed questions about:

* site selection and development
* initial training
* pre-opening and opening support
* how well the franchisor works with the franchisees
* what kind of ongoing training and support do they offer
* ask about how quickly they respond to franchisee questions and concerns
* how effective are their marketing and advertising programs
* are there any indications of financial difficulties within the franchise

Once you have completed this research and after speaking with franchisees, you feel confident that the franchisor provides the kind of training and ongoing support that you need, and that the franchisor/franchisee relations are good, you’re ready to take the four final steps toward becoming a franchise owner.

1. Visit the franchisors corporate headquarter: Meet the senior executives of at least two franchises. To determine whether you are compatible and have common values and goals, it’s best to meet the executives face to face. Most franchises have what they call “Discovery Days,” where serious candidates fly out to company headquarters to spend an entire day with the senior management team and support staff

2. Go to work in the franchise: The only way to really know whether a particular franchise is a good fit for you is to work in it. Some franchisors, in fact, require that potential franchisees work in the franchise before completing the franchise agreement. Most franchisors have programs that enable you to work in their franchise for a limited time to see if it’s a good fit. An opportunity that sounds great on paper may seem a lot different when you actually do the job.

3. Along with your qualified franchise attorney negotiate your contract: The franchise agreement is the actual contract you sign when you buy a franchise. A generic franchise agreement is generally sent with the UFOC and is attached as part of Item 22 in the back of the UFOC. It differs from the UFOC because the UFOC is not an actual contract; it is only a document that discloses information. The franchise agreement is a contract you and the franchisor sign, and it becomes legally binding on both parties.

All the information regarding company policy your rights and responsibilities, and the rights and responsibilities of the franchisor should be the same in the UFOC as in the franchise agreement. But the franchise agreement is not an exact duplicate of the UFOC. Because the UFOC is a disclosure document, it actually contains more information than the franchise agreement. For example, the list of franchisees, the litigation history of the franchise, the business experience of the company officers, and any earnings claims appear in the UFOC, but not in the franchise agreement. If the franchise agreement is not attached to the UFOC, contact the franchisor and ask them to send the agreement to you.

4. Sign the franchise agreement: Federal law states that you must have the UFOC for at least 10 days and the franchise agreement for at least 5 days before signing it. There is every good reason for this waiting, or “cooling off” period. It gives you a chance to make sure that the verbal promises and claims made to you by company representatives are the same as the claims and promises made in the UFOC and franchise agreement.

Use the time you have to make sure there are no discrepancies between your rights and responsibilities as described in the UFOC and as described in the franchise agreement. Have an experienced franchise attorney and a trusted accountant review both documents for you. They will help you make the right choice. A little money spent up front getting good advice from experienced professionals can potentially save you a lot of money and trouble in the years ahead.

In negotiating your franchise agreement, make sure the document leaves nothing out, and get it all in writing. While you have no guarantees that your franchise will live up to your expectations, your contract can help protect your from the risks involved in being a franchisee.

The 5 and 10 day waiting periods are minimum times the law states you must have these documents before signing. But take as long as you need to feel comfortable with the contract before signing. Don’t feel pressured to sign before you are ready whether that’s 10 days or 2 months after receiving the contract. Maybe, it’s just not the right time for you to get into a franchise. And that’s OK too.

Buying a franchise MUST NOT BE AN EMOTIONAL decision. Don’t let your emotions can get in the way of making a smart rational decision. You MUST take disciplined action steps to perform an objective evaluation of the chosen franchise your going to buy.