Franchise Selection 101: Know Thyself
[10 Criteria for choosing a franchise, Part 1 of 10]
by Sean Kelly, President, IdeaFarm
Choosing the right franchise opportunity may well be the most important business decision you’ll ever make. In order to make a thorough assessment of any given franchise opportunity, we have compiled and designated the top ten criteria that you should use to help guide your franchise decision. This list is a compilation not only based on our professional experience, but from recommendations made by the Federal Trade Commission (FTC), the Small Business Administration (SBA), the International Franchise Association (IFA), and other sources.
Criteria #1: Your motivation
People ask me all the time: What’s hot? What’s the best franchise to invest in?
The answer (and converstation-killer) is that there is no answer. Make no mistake: there are bad franchise opportunities, weak concepts, unstable and/or unscrupulous franchisors, and economically unfeasible deals that are bad for everyone, but there is no single opportunity that is right for everyone. Before you go too deep in the research process, you need to define, on paper, your own motivation for growing with a franchise, and what elements are important to you.
For instance, some franchise owners are more motivated by lifestyle and quality of life than economic gain; they would rather have a franchise with limited hours and fewer hassles… even if it means making less. Others want to maximize income and build a fulltime financial empire. Still others are looking to supplement their incomes without leaving their current jobs… or would like to start a business gradually with the goal of eventually leaving their day job. In the end, the best franchise is the one that’s right for you.
Most franchise opportunities are not passive investments. One of the reasons companies franchise is that they want to have motivated owners closely supervising, if not working in, their franchised businesses. So it’s important that you enjoy running the type of business that you’re going to be commiting at least a portion of the next ten years to operating.
How can you tell ahead of time? Spend as much time as close to one of the operations as you can. Speak to as many current franchise owners and their managers as you can. Consider taking a job - or even working for free - in a franchisee’s location for a few weeks or months. Sound crazy? Not as crazy as signing a ten-year commitment without proper investigation.
Read IdeaFarm President Sean Kelly’s articles on finding and selecting the best franchise opportunities at FranBest.com. And download our free franchise opportunity guide:
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POSTED IN: x Franchise 101, x General, x Insider Tips
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