Back to School Shopping: 5 Things to Look for When Shopping for a Franchise
It’s back-to-school time, which means the kids are getting ready for a fresh start. However, it’s not just the kids that deserve a clean slate. You also have the opportunity to start anew as a business owner. It’s a great time for you to buy a franchise! Of course, it’s not as simple as finding a cheap franchise and signing a contract. There is some groundwork that you’ll want to do before you own a franchise. Not all franchises are created equal, which is why we are sharing tips for what you should research when shopping for a franchise business.
1. Has the Model Been Proven Successful?
It’s certainly possible to find a low cost franchise that is a great return on investment. You just want to make sure that the business plan has a track record of success. Find out how many units are being operated and check the company’s closure rate. You don’t want to buy a franchise that struggles to keep locations open. You might even want to visit a franchise location to see the operations in action.
2. How Much Will the Franchise Cost?
It’s probably not a surprise to hear that you’ll want to calculate all of the possible costs prior to taking on a business. Keep in mind that you might have expenses like the following:
- An upfront franchise fee
- Ongoing royalties
- Rent and equipment costs
- Marketing costs
- Insurance costs (i.e. property and general liability coverage)
- Accounting costs
- Legal fees
Whether you’re considering an expensive or cheap franchise, you’ll most likely need to meet minimum net worth and liquid capital requirements. For that reason, you’ll want to get your finances in order before you buy a franchise to see if it’s doable for you.
3. Does the Franchisor Provide Support?
A good franchisor will understand their respective market, so you can imagine how valuable it is to have one that provides support in areas such as marketing and public relations, technology, and training. A franchisor may even be able to connect you to lending sources as well. This kind of assistance can give you the foundation you need to get your business off the ground. Think about how hands-on you want a franchisor to be. You might also want to consider talking to existing franchisees to get their opinions.
4. Don’t Buy a Franchise Before Reviewing the FDD
No matter what kind of business it is, who the franchisor is, or if it’s a cheap franchise, there should be a Franchise Disclosure Document available. The FDD is a document that a franchisor is legally obligated to provide to prospective buyers. It will detail issues like what your responsibilities as a franchisee are, and if there was any past litigation or bankruptcy. The FDD must include details on 23 different categories, so it is sure to be a wealth of information for you.
5. Is It the Right Fit for You?
Franchises are not a one-size-fits-all kind of venture. Before you buy a franchise, you should ensure that the business is a good fit for you. Make a list of your strengths, weaknesses, experience, and skills. Maybe also ask your friends and family what they think your strengths are. For example, are you passionate about education and good with kids? An education franchise might be up your alley.
On the subject of education franchises, for over 20 years, Best in Class has been serving the community through supplemental education. Thousands of kids have benefitted from not only caring teachers and tutors, but also proprietary curricula and technology. In addition, franchisees who buy a franchise with us enjoy operational excellence and an amazing corporate team who provides ongoing support. With 50 locations and counting, we’d say we have a good thing going.
Would you like to own a franchise with Best in Class Education Center? Get in touch with us about joining our team!!Back