Dear Property Manager:
I was laid off a year ago after 27 years with the same company. I have been looking for another job for several months, to no avail. I have a bit of money saved up and I think that this might be the right time to be my own boss. I am considering purchasing a franchise. Can you tell me what to look for in a franchise that would make it a good opportunity? Is this something that will support me moving forward?
Hale W. Concord, NC
You can determine if a franchise opportunity is a good one, by going through the check list below:
Franchise Opportunity Checklist
1) Is there growth potential? Do your due diligence and research this one! The franchiser will provide some information, but you also have to look at the specific location you are considering. If there are already several sandwich shops near that corner, then you need to consider a new location, or a new business.
2) Does the franchise have a strong management team? How long has the team been at the franchise? What are they like to work with? Ask other franchise owners, and meet the management team yourself and determine if they are people you respect and can work with long term.
3) Is the franchise growing? Is the franchise you are considering a healthy one with year over year increase in units?
4) Does the franchiser provide the assistance and training you will need? Different franchises have different systems and support. Yours should be a good match with what you are looking for.
5) What do the other owners think? Are the other franchisees happy with their decision to buy and run the franchise? Talk to several and get their opinions about the good/bad things about the franchise.
6) What kind of marketing & advertising support does the franchise offer? Does the franchiser set up a website for each franchise, do print media or TV ads? Is there a budgeted amount of advertising dollars that you can use? What restrictions/freedom do you have as the franchise owner to advertise your business?
7) Can you make enough profit? Some franchises will sustain themselves and turn a tidy profit. Others are part-time undertakings, at least initially. Check with the franchiser for estimated investment and earnings, and talk with other franchisees to see if they are satisfied with the net.
8) Are the financial records detailed and sound? Have your accountant review the franchise financial statements to determine the strength and possible longevity of the company as a whole. Are decisions being made that are in the best interest of the franchisees?
9) Are you treated with honesty and respect by the franchise? When you talk to owners, management, and others in the franchise, are you given timely and adequate and candid responses?
10) Does the franchise fit your personality and fulfill your passion? To be successful, no matter how financially sound the decision may be, you will have to chose a franchise that you have a connection with—one that suits you and your personality. If you are a health food fanatic, a fast-food chain may not work for you. Think about the company and the product/service and how well you will represent each other.
Good luck with your decision!
Myrtle Beach, NC