Written by the Franchise Matchmakers Team
If you are thinking of buying a franchise, there are many considerations to make as you research your options. You will undoubtedly have questions that come up as you look into the possibilities, but there are others you may not have even thought of. Fortunately, when you know the right questions to ask, you can make an informed decision that will help achieve your business goals.
Getting Started with Franchise Ownership
One of the first steps individuals take when they research a franchise is to speak with other franchise owners to gain their first-hand perspective. As a potential franchisee, you also will meet for an interview with the franchisor. Of course, the franchisor you speak with will also have questions for you. When you go to your interview, be prepared to describe any experience or background you have in the industry. They will likely ask you about your goals and your strategy in establishing a strong customer base. Before a franchisor reaches an agreement with you, they will want to know how you plan to finance your venture and your exit strategy.
The good news is that you never have to go down the road to franchising on your own. Franchise brokers, such as Franchise Matchmakers, are standing by to help you identify the right franchise opportunities and make those important introductions to the right franchisor. Brokers are also a terrific resource for connecting you with funding partners. With their expert guidance, a broker can help you establish a rapport and a foundation for your working relationship with a franchisor, so you both start off on the right foot.
What Questions Should You Ask Before Buying a Franchise?
- What is your approach to solving any conflicts that may arise? As in any business relationship, there are likely problems that come up between a franchisee and a franchisor. Knowing your franchisor’s approach to resolving any issues the two of you may have is important in establishing a solid working relationship.
- Do you provide any financial assistance or guidance? Starting a franchise involves more expenses than simply buying in. Franchisees may need to cover costs related to business insurance, equipment, operating licenses, grand opening activities, employee salaries, legal assistance, accounting, and advertising fees. Buying a franchise is definitely an investment that will take time and money. The franchises that Franchise Matchmakers deal with are in the range of $100,000 to $500,000 (total investment), while some can be as much as one million dollars. Usually 25-30% of your own money will be required to finance the franchise and the remainder can be financed (as long as you qualify). That’s why it is so important to identify the best financing options for you. Very few franchisors provide funding, but they might be able to suggest potential lenders. Franchise brokers are also a great resource for potential funding as they regularly partner with financers who have lots of experience dealing with franchisees – this insider knowledge can make the process a lot smoother.
- Can you explain your training program? The company you are buying into should have a solid operational training program that goes beyond simply training new employees. You want to be sure they have a support system for properly training management and solving other issues after your business is in operation.
- What resources do you offer to help find a great location for my franchise? A franchisor who has done their job should have a keen understanding of the best opportunities in your area for establishing your franchise, and they should be able to help you with negotiating your lease.
Buying a franchise can be an exciting time for any entrepreneur, whether it is your first venture or simply one of many. However, it is vital to know exactly what you are getting into before signing contracts or making financial investments. If you need more detailed information on this topic, reach out to a broker like Franchise Matchmakers today at (888) 347-5187. They will be able to take the guesswork out of buying a franchise, as you choose the business that is best for you.
