5 Things To Consider When Buying A Franchise

McDonald’s, Chik-Fil-A, Midas, Good Feet, Massage Envy, Kona Ice.  What do all of these have in common?

They are all companies that have franchise opportunities.  In other words, you – or anyone else that passes the application process – can build one of these businesses in your neighborhood.  One of the biggest benefits of buying franchise is the instant brand recognition.  Unlike starting say, KJD Legal, everyone knows what you get when you go to Chik-Fil-A.  It’s already been branded.

Another benefit of buying a franchise is that the systems are already in place.  The corporate head wants you to succeed.  So they will tell you, step by step, how to set up your store so your product is presented exactly the same way the product is presented at the store 100 miles away.  Your accounting, inventory, training, advertising and marketing and other systems are all there for you to follow.  You don’t have to fumble around in the dark, making them up on your own.

If you are considering this step, think about these things:

  1. The initial investment.  Franchise opportunities exist for anywhere from several hundred dollars to several hundred thousand dollars.
  2. What is included?  With varying costs of purchase, it isn’t surprising that different corporations include different things in the franchise package.
  3. Your obligations.  Financially, legally, you need to know what you are giving to the corporation on an ongoing basis in return for operating the franchise.
  4. The level of support.  Some franchises have management levels that monitor and assist, others let you figure things out on your own.  Know what you are getting and whether it matches with what you need.
  5. The exit plan.  You want to know ahead of time what happens if.

If you are considering this monumental step, there are several great resources available to you.  First, Jim and Thom over at FranNet can help you sift through the hundreds of choices to find the right opportunity for you.  Another great resources in on Entrepreneur’s website. Finally, KJD Legal is here as well to talk through this process.  Buying a franchise is a large financial commitment that carries a number of legal obligations. We’re here to help you succeed!

 


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