For those who aren’t confident to start their own business from scratch, buying a franchise is the best option they’ve got. But, before finalizing your decision about this matter, there is the point you must know. This is necessary especially if you choose to go toward this direction.
Among the things you have to do is to answer the essential questions surrounding this venture. To identify what are those, here’s a list you may refer to.
What are you planning to franchise?
As you welcome the idea, it’s important that you’re clear about what you want. Determine what type of business do you want? It should be something that you’re interested in.
Say you want to explore opportunities related to health and wellness. You may opt to buy a fitness-related franchise. Since this is something you’re interested in, you’ll be eager to learn and run it yourself.
What type of ownership do you prefer?
Before you get involved in franchising, you have to identify what type of ownership you prefer. There are basically different ownership methods, and they are the following:
- Single Unit. This is the most common type of ownership, which allows you to manage a single franchise in a specific area. It usually appeals to those who want to start small, since it’s the most affordable. In terms of management level, it’s more personal since you can oversee the operations yourself.
- Existing. This is an option to which you’re going to buy out an existing franchise. As compared to a single unit, it has a better foundation. Since it’s been established for a while, there’s a better flow of profit.
- Multi-Unit. For this one, you’re getting a franchise in bulk. You could say that you’re buying them in wholesale to spread over a particular region or location. Comparing it to the first two types of ownership, there’s greater profit for this one.
- Master. The master level is an ownership arrangement which offers bigger and wider span of responsibilities. There will be individual franchisees working under you. It’s like you’re managing an entire region, say all of New York or California.
How long until you get ROI?
You need to get a sense of how long will it be until you make a profit out of it. Since you’re making an investment, you’re looking into the return and steady cash flow. This is a piece of vital information you have to discuss with your franchisor. After all, this is the whole point of why you decided to get into it.
How much support or help do you get?
Training is one of the keys to the success of your franchise. The franchisor must be able to provide support for you to stand on your own. Many times, franchisees commit the mistake of not knowing enough. Because of this, they end up ruining their chance of success.
Before you make a final decision about franchising, it’s important that you ask these question. By doing so, you could free your mind from worries and doubts. If there’s anything you want to clarify, it’s always good to discuss it with the franchisor.