Are You Ready to Own a Franchise?
Owning a franchise may not be the right option for everyone. According to the Federal Trade Commissions Consumer Guide to Buying a Franchise, owning a franchise requires specific types of skills, experience, and personal characteristics. In many ways, buying a franchise is like opening your own business; in some ways, however, it is quite different. The following questions are meant to get you thinking about what it takes to own/operate a franchise. It should also help you objectively analyze whether your skills, experience, and personal characteristics would make you a good candidate to own a franchise:
Business and Management Skills
Have you ever owned a business? Do you want to make all business decisions yourself or can you follow franchisor rules and accepted practices for doing business? Do you have any business training? Do you have any experience with managing employees and responding to customer concerns? Do you plan ahead? Are you self-motivated?
Financial Preparedness
Do you have a good credit score? Do you realistically understand how much investment capital you need to buy a franchise? Are you prepared to risk and possibly lose that investment? What is your net worth? Do you have sufficient financial resources available for you and your family to live on until your franchise starts making money (this may be one or two years)?
Personal Preparedness
Are you prepared to work 12+ hours per day, 6 days per week, and even on Sundays and holidays until your business is up and running, and possibly for some time after? Are you physically prepared for the stress of opening a new business? Is your family prepared to go through the stress of starting a new business with you?
You dont necessarily need all of the skills, experience, and personal characteristics mentioned here to be a good candidate. You may decide to hire or partner with someone whose skills and experience are complementary to yours. You may also decide to acquire additional skills through taking classes or hiring professionals to handle specific aspects of the franchise about which you are not knowledgeable.
The key to making a wise choice about franchising is to be informed about what your business, financial, and personal strengths and weaknesses are and develop a comprehensive plan to compensate for any weaknesses.
Sources
Federal Trade Commission
