Buying a franchise is a great way to build a business empire without having to start from scratch.  The benefits of franchises include established processes, a tested concept, and name recognition.  Despite having the aforementioned things in common, franchises still offer a great deal of variability and not all franchises are a good fit for every business owner.  When choosing a franchise to buy, it is important to examine a few important factors to make the best decision.  Below are five things to consider when buying a franchise.

Get to know yourself

Different personality types are better suited to the franchise business model.  Franchisors expect franchisees to operate within the established systems, processes, and rules.  There is not always room for creativity or impulsivity.  For someone who finds it difficult to operate within a highly regulated environment, adapting to the franchise business model may be difficult.

It is also important for business owners to know where their strengths and interests are.  For example, someone who is tech-savvy may excel in a franchise concept like cell phone repair or IT solutions for small businesses.  A person with a background in education may gravitate towards a concept like tutoring or educational products.

Learn what franchises are available

Many people still equate a franchise with businesses like fast food or a retail concept such a pet supplies.  There are hundreds of types of franchise businesses that are profitable options.  Start by doing some online research to learn more about the available options.  One great resource is Franchise Canada Online.

Know your numbers

Before making an offer on a franchise, you need to have a firm grasp on two important sets of numbers.  These numbers are what you can afford to spend and franchise costs.  Reviewing your financial situation should be done with a qualified accountant or bank officer that has experience working with small business owners and franchises.  In addition to the cost to purchase the franchise, you also need to confirm ongoing expenses such as franchise fees, inventory or equipment, and employee costs.  These expenses should be assessed alongside sales projections and other financial information included in the franchise disclosure document.

Understand your local demographics

Take a look at what businesses are in place locally and what is lacking.  Understanding what products and services are currently being underserved despite a demonstrated need is a great way to narrow down your franchise options.  Take a look at things like the local demographics, infrastructure, and areas similar to your own where franchise concepts are thriving.

Look for agile franchisors

This year all types of businesses had to be creative, flexible, and agile in response to the global pandemic.  When assessing franchisors, take a look at their ability to successfully pivot things like offerings or delivery methods during these past few months.  Also look at how franchisors have stepped up to support franchisees, both during the initial phase of the pandemic and ongoing.

Franchise businesses have long been a great model for new and experienced entrepreneurs.  Taking time to consider the five things listed above is one way to start down the road to a successful franchise purchase.  If you have questions about buying a franchise, contact us to learn how we have helped people just like you to make a successful franchise purchase.