In the United States, it is hard to move down a few blocks without crossing a franchise like McDonald’s, Burger King, and Subway. However, franchises in the US are no longer limited to giant food chains. There were 773,603 franchises in the US in 2019, including real estate, florists, electricians, and other essential services.
The idea of having an established brand name and a tried and tested way of business makes franchises popular among business owners. However, like every other business, it is not without risks.
Here are few things that you should know about franchising before you decide to start one of your own.
How much will it cost you?
Every business needs an initial investment, and you need to decide whether the amount is within your means. The purchasing cost of inventory, setting up of the place, and other expenses require cash. You also need to decide whether you have enough capital to keep things running until you reach a break-even point.
What is your personality type?
The franchise business model has its advantages: an established business style, a well-known brand name, and an existing and loyal customer base. However, not every franchise will fit your personality. You must understand that each franchise system is in different stages of development. A Well established system requires owners to follow an established manual, with little room for feedback, where a smaller emerging system will welcome feedback from its owners as it grows. You must understand your type of business personality and how it fits within the system you are interested in. Remember that the franchisor has ultimate control.
How much time can you invest?
Different franchise systems require different time commitments. If you are looking for an owner-operator, you will be required to be part of the day-to-day running of the business. Some systems are passive or semi-passive, which means your role is more of a CEO and not of an Operator. Finally, there are Investor driven systems where the franchisor will operate the system, and you will be a passive/investor, owning the business but not running it.
What help does a franchisor provide?
A franchisor can help you set up the business, educate you on policies and practices, and train your staff on delivering quality service. They also can share the collective learning gained by other companies who have been in a similar position as yours. Many systems, especially in the service sector, will provide a proven marketing program to acquire clients.
What are your plans for the long run?
A franchise business is exciting and can be run by your family for generations to come. You can grow by adding new territories or new locations. As you grow, you will build equity and provide you with a nest egg for you and your family to enjoy in your later years.
If you are thinking about starting a franchise business but don’t know where to start, you have come to the right place. We offer franchise consulting services in the USA. At FranVice, will guide you through every step of getting your franchise. From finding funds to choosing the right franchise type and finally making the purchase, we will help you through every step of the process. You can reach out to us at 978-728-9211 or fill our online contact form to know more. Just like a Realtor, our services are free to you. We are compensated at closing from the franchise you choose.