Becoming a local franchise owner is a great opportunity for someone to become a business owner without having to just start a business completely from scratch. You don’t have to formulate a whole new business product line because the parent company has already done so, and they’re usually responsible for running marketing campaigns. Some franchise owners are former employees of the franchise parent company, but many are brand new to the opportunity and dive in hoping to become profitable. If you’re thinking of running a franchise location, there are three questions you should ask yourself before you get started.
1. Are The Rules And Values From The Parent Company Values You Buy Into?
Since a franchise is not built off of your ideas but off of another founder’s ideas, it’s important to consider whether your business ownership plans can work with the franchise’s established codes. Franchises that are corporations will usually have written policies on procedures and workplace conduct. They’ll also usually already have an established philosophy or mission statement, and therefore have a set of known values. You can become a successful franchise owner without having a previous career based in the franchise’s industry, but you won’t be successful if you don’t embrace their values.
2. Do You Have Adequate Money And Time To Invest In It?
Like starting your own business, you will need to be able to finance your endeavor to begin a local franchise. So consider whether you have the cash on hand to get started, or if you need to apply for a business loan. The good news is business loans used to fund franchise openings usually have higher approval rates because the banks are able to see whether or not the company has done well or not. But they still will need to check your own finances and credit. You will also need be prepared to put in a lot of time working to get your franchise up and running. Eventually, you may be able to hire managers who can better run the day-to-day responsibilities of the business, but initially you will probably have to do a lot of leg work.
3. What’s Your End Game?
Ultimately you need to think of how long you want to be a franchise owner, what goals you’ll want to have accomplished during that time, and how you plan to exit it. This might seem like a small thing, but it’s important to know because some franchise parent companies do have certain obligations for owners to meet before they exit. You’ll need to know things like how you can sell off your ownership stake in the franchise, or rules on passing it down to family or friends. You’ll need to make sure you go in knowing your options.