So, you are serious about buying a franchise. How do you find out what, when, where and how much to spend? There are thousands of business franchises out there, so you’ll need to do a lot of research to identify the right opportunity for you. The cost of buying a franchise, which can start at around $50,000 and run upwards of $300,000, is reason enough to be very careful in learning all you can about franchising specifics. Buying a franchise is not a guarantee of success and should be treated the same as any other kind of investment.
You can research the various franchise opportunities on the Internet, sorting through the many choices by industry, size of investment and location. Many online tools exist where you plug in this information and a list of suitable opportunities comes up for your perusal. For example, visit the International Franchise Association (IFA)’s online assessment tool.
The IFA recommends that potential franchisees seek the help of a franchise lawyer, a business consultant, and an accountant when investigating franchising opportunities.
Franchise consultants can be a valuable resource for answering your questions, especially if you are a first-time franchisor. (Many franchisees get the bug and buy a second or third outlet to generate more revenue. Once you have the expertise, you may find that this is a strategy for you.) Franchisors sometimes offer “bulk buying” discounts, that is buy two franchise outlets at once for somewhat less than buying them one at time.
The contract between franchisor (head office of the chain) and the franchisee (that’s you!) can be very complicated and lengthy and should not be left to an unprofessional eye to peruse and sign. The following are a list of reasons why you should use a franchise lawyer:
It’s a good idea to visit several franchise shows. The shows are commonly held in most regions. You’ll have an opportunity to meet and chat with franchise representatives from various sectors, and will be able to “comparison shop” for the best place for your investment. Don’t be shy: get in there and ask the hard questions. If they don’t know or won’t say, move on to the next booth!