Considering that sales from franchises account for billions of dollars in revenue every year, buying a franchise is statistically the safest way to own a business – provided you choose the right franchise. Below are listed seven key steps that will help you choose the best retail franchise for you.
1) Evaluate your interests, skills and financial situation. Consider your interests and skills before you buy a retail franchise. What about owning a retail franchise appeals to you? Are you willing to work long hours – evenings, weekends, and holidays? Make sure you understand your financial situation; it could help you narrow down your options to what you can afford.
2) Check out opportunities. Have you narrowed your options down to those that match your skills set, interest and budget? Ask to see the franchisor’s Uniform Franchise Offering Circular (UFOC) and financial statements. Ask existing and former franchisees whether or not they are satisfied with their earnings and the franchisor’s performance and support.
3) Research your market. Do you want to open up a golf retail store in your community? Does the market support this decision? If you live in a small town with freezing winters and no golf courses, think again: the presence of a demand for your product or service is essential to franchise success.
4) Location, location, location. The location you choose is critical. For example, if you settle down in an infrequently traveled area far from complimentary business or tucked away at the back of a strip mall, you severely limit your earning potential. The truth is that not all retail stores work in a mall setting, contrary to popular opinion. Always gauge the likelihood of outsiders visiting your store prior to choosing a location.
5) Once you choose a franchise, secure financing. When it comes to financing, there are numerous options, including bank loans, home equity loans and SBA guaranteed loans. Moreover, some franchisors offer in-house financing. Alternatively, you may not need to borrow money for less expensive franchises, such as home-based businesses, and some franchisees charge the fee on a credit card.
6) Attend training and hire staff. You will need training and an operating manual in order to run your business. Generally, franchisors provide training. You may or may not need to hire a staff, depending on your franchise concept. Prior to your opening, you will want to post signs and run an ad advertising openings.
7) Obtain the necessary permits and insurance. You might be required to apply for several federal, state and county licenses and permits. Requirements for insurance vary according to industry. Take a look at the Franchise Agreement for more information.