10 ways to assess a franchise

f you've always wanted to own your own business, one of the easiest ways to do so is to own a franchise. They are great because you are the manager/owner-the boss, but you don't have to come up with your own business plan. It's already laid out for you. With a franchise, you are given the freedom to run your business, but you have the support of a larger company to back you up. Franchises come in all shapes and sizes. McDonald's fast food restaurant is a franchise. So is Curves for Women (a women's fitness center). So is UPS. There are many to choose from. So let's just say that you've decided you want to own a franchise but you're not sure what type. Or maybe you've decided on the specific franchise you want to open, but you're not sure if it's going to be as profitable as you originally thought. Before you go rushing into any major decisions, let's review 10 ways to assess a franchise. This way you'll be sure you're getting a good deal (or not).

1. What is the business? Think about exactly what you'll be doing. Is it something you're interested in? Do you think it has the potential to yield a decent profit?

2. What is the location of the franchise like? In business, location is everything. It's great if you have an excellent product to sell and outstanding advertising. But if no can ever find your business or if it's in an awkward location, no one will be purchasing your product or service. Be sure that if you're buying a food franchise that you put it in an area of town that people will go to looking for food.
3. What kind of success has the franchise experienced in other locations? If you look at the history of the franchise and it looks rather sketchy, perhaps you would do well to look into a different franchise. You, on your own, are probably not going to be able to resurrect a history of poor success. If you want to be successful, choose a franchise that has a history of success. At least that way if you don't succeed you'll know that either you choose a poor location or you weren't cut out for franchise business.
4. How long has the franchisor been in business? If the company you're franchising with has only just barely begun to franchise their business, you may be taking a serious risk in buying one of their franchising. Now, risk is no necessarily a bad thing. Just be sure that it's a calculated risk.
5. How financially secure is the franchise? Do you know how financially secure the franchise is? Are the owners reliable and respectable business people? Will their actions reflect poorly upon your business? You should know the answers to these questions.
6. What is required to start the franchise? Be sure that the franchise you're buying has reasonable start up fees and that you'll be able to receive a decent level of return. If your franchise has unreasonable expectations, it may not be the one for you.
7. What kind of competition is there for this franchise? A healthy level of competition is good for business. But too much can make it difficult to keep your company afloat. Be sure that you know who the competition is and how severe it will be.
8. How much training and support will you get? A good franchise will offer you plenty of training and support throughout the course of starting the business. They should be able to tell you the kinds of things you should expect, as well as thoroughly train you on all aspects of your franchise.
9. What does the franchise agreement look like? This will differ between franchises, but each one should clearly dictate how long the agreement will run and whether or not you will have the opportunity to renew.
10. Visit other franchises. This is a good way to see how the company is run without having to take someone's word for it. Look around. Are the other franchises of this company well-run? Are they clean? Are the profitable?

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