28 Feb Considering Buying a Franchise in 2017? Here are 4 Steps To Get Ready
Buying a franchise isn’t an easy decision to make because you need to invest a lot of money, effort, time, and dedication into the venture. People who want to get out of the daily grind consider franchising a safer and easier option but this choice also requires a lot of hard work. Here are some things you must consider if you consider buying a franchise in 2017:
#1 Determine Your Budget
You don’t just need to set a budget for your initial investment, but also the monthly expenses. You won’t earn enough money to reinvest in your franchise for the first few months so it’s important to have a cushion. Determine how much you can invest upfront and every month for the first year and then look for franchises. This would ensure you don’t strain your budget too much. Here are some things you should consider:
- Look at your personal finances and determine how stable they are.
- Consider your financing options and determine which one would be the best for you.
- If you intend to get a loan, speak with the financial organisation and determine how much you would get.
- Make sure you can live your life comfortably without gaining any income from your franchise for the first few months.
#2 Determine the Industry
The next step is to determine which industry you want to be a part of. Some industries have more lucrative franchises than others, but that doesn’t mean you should open one in that field if you don’t have the skill. Fast food franchises are very popular but they’re not for everyone because they require some knowledge of the industry and understanding of the regulations involved. While the franchisor will offer some training, you need to possess enough skill, knowledge, and experience to run such franchises successfully.
#3 Know the Legal Facts
Many franchisees don’t consider the legalities involved in such transactions and often bear the consequences down the line. It’s not enough to read the contract carefully and pay the money. You need to understand the implications of buying a franchise, the laws governing the industry the franchise is in, and other such legal factors. It’s a good idea to hire a legal expert in the franchising industry and ask for their assistance. They will help you understand the rules and regulations of the industry and make sure you know what’s involved in the contract.
#4 Investigate Franchises Thoroughly
Not all franchises can deliver what they promise so it’s vital that you investigate all options thoroughly. Here’s what you can do to get the best possible information:
- Visit the franchise website and speak with the franchisor before you begin your research. You’ll waste less time if you know you’ll be allowed to purchase the branch before your research.
- Look at online reviews of products and services, and analyse the company’s reputation. Franchises will only succeed if they have a well-established reputation and a good customer base.
- Visit a franchise branch and speak with the owner about their experience with the parent company. Most will provide honest facts and opinions about the franchise. This will give you an inside look at the company’s operations.
- Ask for a copy of the contract and study it with the help of a legal expert before you commit.
If you want to know more about more about buying a franchise or want some advice, feel free to get in touch with us at The Franchise Institute. You can call us on 1300 855 435 or fill in this contact us form and we’ll reply as soon as we can.
Thanks for reading,
The Franchise Institute Team
1300 855 435