3 Ways to Decide Which Franchise Opportunity is Right for You
Updated: Apr 23, 2019
For those who want to start a business, a franchise opportunity may be in your best interest. It allows you to be your own boss while also ensuring that you have help growing the company from people who have had success. Last week in Las Vegas at the International Franchise Convention Gary Vaynerchuk was the Keynote Speaker. He referred to franchise owners as "Entrepreneurs with Training Wheels." He is right because the franchise company is going to be there to support and help you.
The Impact of a Brand
Ideally, you will open a franchise under a brand name that people know and love. According to Franchise Update Media, having the power of an established brand name is typically why a person would buy a franchise instead of starting a business from scratch. However, it is critical that you do due diligence to determine how well it can do in a given area. For instance, it may not be in your best interest to start a franchise in a town where there are other locations already open.
Will it Be Profitable?
The type of business that you start depends on many factors, including your interests and target market. According to United Water Restoration Group, due to a number of factors such as older homes falling into disrepair, the American restoration industry pulls in $60 billion annually. Therefore, this may present a growth opportunity for those who are looking to be profitable both now and into the future.
However, before going into the restoration industry or any other that interests you, be sure to understand any regulations that you may face. Even a minor violation could have an impact on your company's bottom line. Furthermore, you may not want to start a business in an industry that is heavily regulated if you are a creative type or simply do not like dealing with a lot of red tape.
What Are the Costs?
According to Signarama, it is necessary to pay a franchise fee to obtain the rights to run your company. It can also cost more money to build and maintain a building or buy equipment. You could also be responsible for paying employees or other costs related to running a business. This is where you want to do your homework.
Be sure to ask if the parent company offers financing (most don't) or other incentives to make a franchise easier to run from a financial perspective. Furthermore, do not forget to ask about any royalties or other fees that go to the parent company. This will need to be factored into any analysis that you do regarding how profitable a franchise business opportunity could be. This information is available under Item 7 in the Franchise Disclosure Document.
If you are looking for a business opportunity, owning a franchise company may help you achieve your goal. Furthermore, it allows you to become your own boss while helping others in your community find work or have access to quality goods or services.