It’s amazing how many folks are interested in buying a franchise, especially after a huge economic crisis. Typically during recessionary periods when people lose their jobs from corporate America there are more franchise buyers in the market. This time, we noted there were many people looking to buy franchises, but many who couldn’t afford it because they could not get financing. Commercial credit right now is tight. Nevertheless, there are more people out kicking tires and looking to buy franchises than ever before.
Perhaps, it is for this reason that when I give speeches locally here to business people, and those that wish to own their own businesses in the future, about franchising, and I am always barraged with questions. Generally the short sessions I speak at are filled up during the seminars. Not long ago, a young couple asked; how do you rate a good franchise business?
Well, this is a good question and there are many ways to choose the best franchise for yourself and your family. First of all it’s a lot of work rating various franchises, and trying to make a choice of which one to purchase, you have to look in your own mirror first. You must know what type of business you might like to run, how much money you have to spend, and if you see yourself doing it for the next 10 years. After all, once you buy a franchise it is a long-term commitment.
Many corporate employees have noted that they change jobs every 2 to 3 years, but you won’t find that in franchising, it doesn’t work that way, the stipulations in the terms of the franchise agreements are much longer. So that’s something you need to think about right away. Once you have considered those basic issues, you need to consider how strong the franchisor’s brand name is in your market. And you have to consider if people will actually purchase the goods or services that will be offered by that franchised outlet.
Next, you have to look to see if there is a lot of litigation going on with that franchisor. And it’s important to see that the franchisor has good capitalization, a strong team of executives with lots of experience, and you could rate the franchisors, which have been franchising for longer than five years much higher than the others. I hope you will please consider these various facts, as you choose the best franchise that’s right for you.