Am I a Good Franchise Candidate?
With the knowledge that most new businesses are likely to fail within the first few years, it makes sense to consider a franchise, as the success rate is far greater. If you are at the point where you are reading this article, you are probably someone who has already entertained the idea of owning a franchise. You may have started and/or owned a business in the past. Perhaps, you are a successful salesperson, looking to work for yourself? You may have industry experience that makes you uniquely suited for a specific franchise opportunity. Possibly, you have grown children, are financially secure, and are ready to live your lifelong dream of running your own business. Whatever your background and motivation, it is important for you to investigate whether or not a franchise is right for you.
An ideal franchise candidate needs to be a self-starter and an ideal franchise candidate must be able to strictly follow a proven system. While the previous statement may seem like a contradiction on its face, it is not once you dig a little deeper. As a self-starter, you find ways to be more efficient. You are willing to accept risk and are confident in your ability to succeed. You are highly motivated and drive yourself to do well. When things are not going well, you never hesitate to jump in and get your hands dirty. You work hard today, but always have the future in mind. These are all great characteristics to have as a potential franchisee, provided you don’t try to reinvent the wheel.
The greatest aspect of franchise ownership is that you are working with a proven system. For the most part, if a company is offering franchise opportunities, they have already built a successful business and have proven that it can be replicated. The franchise company should have already worked out many of the costly mistakes that are made when starting a new business. They have put a structure in place to teach you their business, even if you have limited or no industry experience. The training and support continues once the business is up in running. But you must follow the system! If you were to interview the most successful franchisees in a franchise company, you would find that just about all of them strictly adhere to the franchise system. If you are not the type of person that can do the same, you should consider another alternative, such as starting a business of your own.
An ideal franchise candidate will be well funded. As with any business, getting up and running can be very costly. It is even more so when one buys a franchise. There is an upfront franchise fee and ongoing royalties that need to be paid. Franchise fees can run from below $10,000 to well into the six figures. The average franchise fee will usually fall between $25,000 and $50,000. Some franchise companies will help finance this charge, but most will not. Often, the upfront franchise fee may include training and other benefits, but this is not always the case. The continuing royalties can be a set amount or a percentage of income. When royalties are base on a percentage of income, it is usually based on gross income, which is an important consideration when contemplating franchise ownership. The franchise fees and royalties are in addition to the overall cost of starting and running the business. At first glace, franchise ownership may seem expensive, but in the long run, it is usually a wise investment. The company name alone will often provide you with a built-in customer base. You will also be able to take advantage of volume discounts that you would not otherwise have access to. In addition, the franchise company may provide you with site selection and financing. These benefits alone may offset the additional startup costs. Just be sure to do your research.
An ideal franchise candidate will have done their research. There are many ways to find out more about franchise opportunities. Use the Internet to your advantage. Check with the Better Business Bureau. Find out what the company’s customers have to say. Use the Web to check out the competition. If possible, find a location in your area and make a visit. Franchise related websites, such as http://www.buythatfranchise.ca list many opportunities and provide detailed information such as franchise fees and royalties. Once you have narrowed your options, you can request additional information by completing a form containing questions provided by the franchise company. Results can be filtered to find franchises being offered in your area. Once you have been contacted by the franchisor, continue your research.
Ask the franchise company for the contact information of their current franchisees. While they will probably provide you with a list, ask the company for a complete list. Try to select franchisees in territories similar to your own. Contact the franchisees and schedule a good time to speak. Have a list of questions ready that you want answered. Find out how much time passed before they started making a profit. Are they receiving the support they need? How many employees do they have? How active are they in the business? What would they do differently if they had to do it again? Take full advantage of these mini-interviews.
An ideal franchise candidate has good interpersonal skills and a great attitude. If you are going to run a business, you need to be able to work well with others. You may need to hire and manage employees. You will need to interact with customers. You will want your employees to interact with your customers in the same positive way that you do. Negativity breeds failure and you must ensure a positive atmosphere at your business. The Customer is King should be the prevailing position of you and all of your employees.
An ideal franchise candidate will have business experience. Having run a successful business in the past will give you a leg up when getting involved in a franchise. Even if you ran a not so successful business, you will have hopefully learned from your mistakes, which will be helpful. Corporate experience is also a big plus. Experience in sales, management, marketing and human relations can be invaluable in your new business. Executive experience and budget responsibility will surely benefit you. Even if you do not have any of the skills previously listed, you can still be successful. You will just have to work a little harder.
Every franchise company will have its own view of an ideal candidate. Some franchise opportunities require industry experience and others require additional skills. Do your research, come up with the financing, use your business experience, stay positive and follow the system. Hopefully, you will be the ideal candidate for your ideal franchise opportunity.