If you’re thinking of buying a franchise someday, and you want to know the best way to go about doing it, you’re at the right place.
But, before we go on, if you haven’t already, please invest 5 minutes learning about my franchise business background and my credentials. (You can do that later, too.) Just click on, “About Joel Libava” towards the top of the website.
“Joel Libava doesn’t just fork out lame general information about becoming a franchisee; he guides you to maximize your strengths when you enter this adventure. I have three words for you, listen to Joel.”
- John Falchetto, Business Coach
Now it’s time to learn the best way to go about buying a franchise….
Let’s go!
Fact: The things you do at the beginning of the franchise buying process can really impact your chances for
And, the neat thing about success is that you get to define it.
If you’re thinking about having more of a stake in your career – in your professional life, becoming the owner of a franchise is worth a look.
Let’s start…Let’s do this step-by-step
1. Learn about the business model
Definition:
A franchise typically involves the granting by one party (a franchisor) to another party (a franchisee) the right to carry on a particular name or trade mark, according to an identified system, usually within a territory or at a location, for an agreed upon term. The franchisee (you) are granted a franchise license to use the franchise company’s trademarks, systems, signage, software, and other proprietary tools and systems in accordance with the guidelines in the franchise contract.
Pretty exciting stuff.
In a nutshell, the franchise company came up with the idea for the service or product {or both} and is granting you the right to market it for them. Since it is their idea, they require you to market it in a specific way. It is their system, so they write the rule book. The rule book in this case is their operations manual, and franchise agreement. Not only must you do things their way, you must pay them an upfront franchisee fee (license), and ongoing royalties. The royalties are usually in the form of a % of your gross sales, although sometimes there is a flat monthly fee. In addition, there is almost always an advertising/marketing fee paid monthly along with the royalties.
Got it?
If you’d like to learn a little more about the greatest business model ever invented, read this really short post-and grab the free download that I included in it.
2. Are you a good fit for a franchise-type of business?
Not everybody is right for a franchise. The sometimes rigid systems, policies and procedures can be real aggravating for some. Rules is rules. Just how comfortable are you with rules? I created a very unscientific franchise compatibility quiz for you to take, so that you can find out if you may be right for franchising. As I said, it’s not scientific, but it works. TakeTheFranchiseQuiz.com
3. Your, “Take The Franchise Quiz” results
If you’re satisfied with your score, (I score the quizzes individually) and you’ve determined that exploring franchise ownership makes sense, congratulations!
If you’re score was low…real low, and in your heart you know that you’d be better off not looking at franchises, it’s okay. There are other ways to get into business.
Franchise Ownership Is Not For Everyone
4. Five things to do right now
Before you start your search for franchise opportunities, there are a few things that you need to do. As a matter of fact, there are 5.
I’m the exclusive guest blogger on franchising for SBA.Gov, the US Small Business Administration’s website. Read, “The 5 Smart Things To Do Before You Search For A Franchise.”
Then come back to this webpage.
5. What do your finances look like on paper?
Don’t guess. Don’t estimate. Grab a calculator.
You need to do a simple net worth statement before you start your franchise search. It’s easy…but it may take a little time for you to gather all the information you need. So, do that first.
Then..
Add up all of your assets. Then add up all of your liabilities. The difference between the two is your net worth. You’re going need to have this information on hand once you find a few franchises that you like.
That’s because the franchise companies that you request information from will need this information to make sure that you’re financially qualified for their opportunity.
If you don’t know where you stand financially, you’ll waste an awful lot of time learning about and getting excited about franchise opportunities that you may not be qualified for.
(Most of the franchises that you find online will clearly state the financial requirements needed to qualify)
6. Look Inwards
When buying a franchise it’s important to focus on the things that you’re really good at–and them match them up with franchises that will allow you to utilize them. In addition, you need to start thinking about the things that make you unique. What are some of your personal traits? What are your characteristics?
Put Pen To Paper
Make some lists…
List #1- write down all of your top skills. What are you best at? Are you a strong salesperson? Are you a skilled negotiator? Are you a fantastic manager of people or data? Don’t hold back…you’re not being a braggart, you’re just writing these things down so you can see what you’re bringing to the table.
List #2- write down your personal traits. Are you shy, or are you outgoing? Are you socially conscious? Are you a leader? Are you competitive?
Take a look at your two lists. You now have something to go on…something to use in your search for a franchise to buy.
The trick here is to only look at franchises that will allow you to use your top skills, and at the same time match up to your personal traits.
7. Where to search for great franchises
Obviously, most of the time you spend searching for franchise opportunities to investigate will be on the internet.
So, instead of typing in the word, “Franchise” into Google or Bing, and ending up looking something like this
I have put together a collection of the 10 best franchise websites for you to spend time on…quality time.
Remember this:
Focus on opportunities that match your skills, personal traits, and budget. Skip everything else.
8. Other Things You Should Do
Now that you know how to begin your search for a franchise business opportunity–it’s time for you to do just that.
Look around. See what’s out there. There’s bound to be a few concepts that turn you on. After all, over 3,000 different franchises are currently being offered in the US.
Read Some Informational Franchise Business Articles
Below, you’ll find links to franchise business articles from around the web that will help you stay centered. You’re going to find that it’s real easy to get overwhelmed as you search for the right opportunity.
And, you may start to get nervous.
If you find yourself getting a bit nervous, don’t worry. It’s normal.
Think about it for a moment; what you’re really thinking of doing a real-life makeover. You’re thinking of being a boss. Being The Boss. You’re seriously considering taking on some risk. Well, congratulations; we all have to take a risk, once in awhile.
You can do this. Just be smart about it.
One way to be smart about a major decision like this is to have a guide.
Maybe you should work with;
- Someone who has real-live experience in franchising.
- Someone who’s owned a franchise.
- Someone who’s a franchise industry insider.
- Someone who can watch your back, and make sure that you’re on the right track.
- Someone who will make sure that you’ve left no stone unturned
“When people ask me the million dollar question would you do again, there is NO QUESTION that I would work with Joel Libava again. His advice to think longer term really helped me focus. “
- Dave Brewer, Multi-Unit Franchise Owner, Great Clips
“Joel’s advice greatly helped me streamline my franchise search. He is able to ask all the right questions and give all the needed information. A great source of advice. Highly recommended“- Jon Michelson, Future Franchisee
Useful Franchise Articles
Two Words That Really Don’t Exist in A Franchise Business
Franchise Concepts That Offer Discounts For Buyers
Dumb Reasons To Buy A Franchise
Make Sure It’s Really a Franchise
Multi-Unit Franchise Ownership
The Top 10 Ways to Lower Your Risk
Don’t forget, you can get free franchise information by subscribing to my award-winning blog.
“Joel Libava was invaluable in helping me determine if franchising was right for me. He’s truly an expert in this field. If you are thinking of franchising, don’t do anything until you have talked to Joel.”
-Susan K., Chicago, Illinois
