6 Questions to Ask Before You Buy a Franchise Business
Do you want to buy a franchise? If so, then you need to ask yourself some questions before hitting that buy button. In this blog post, we are going to share six questions that every entrepreneur should ask themselves before buying a franchise. These are important things to know when looking into the opportunity and will help ensure your future success. If you’re thinking about a franchise purchase, it’s helpful to get a franchise assessment beforehand because it will help you understand the costs and risks involved.
What Are the Total Investments Required to Own and Operate This Franchise?
Your initial investment will depend on the type of franchise you buy. For example, if you buy a food truck then you’ll need to purchase the truck and all of the equipment that goes with it. If you buy a smoothie store, the building cost plus equipment inventory will be higher than if you bought a food truck.
What Kind of Time Do You Have To Commit to Your Business?
Before you purchase a franchise, commit yourself to find out how much time you’ll need to invest. Consider how much you value your independence, whether you are frequently on call at work, or have a busy travel schedule before committing to the buying process.
What Level of Training and Support Do You Receive From the Franchise?
Depending on the franchise, there are different levels of support. At the most basic level, you do your own marketing with little assistance. Other franchisees offer a bit more training and marketing support. While others provide more involved, hands-on assistance to help you get your business up and running as efficiently as possible.
What’s the Success Rate of the Other Franchise Locations?
Successful franchise systems have a high success rate. The more successful the franchise, the more you’ll want to buy in. If you buy into a franchise that has an 80% failure rate, the odds are not in your favor so it’s always a good idea to consider the revenue and profitability of all their current locations.
Are There Additional Yearly Fees to Consider?
You want to find out if there are any additional yearly costs involved because that could have a significant impact on your profitability. Find out if there are any annual fees, royalties, or dues payable to the franchisor for items like advertising programs (initial or ongoing)?
What Is Expected of Franchise Owners and How Can a Franchise Assessment Help?
By understanding the cost and time commitment of your potential franchise, you can make an informed decision about whether it’s the right fit for you. There are several things to consider, including fees, support, and how the business will be managed. Talk with the company to get answers about what you need to know.
There is so much to consider before you purchase a franchise. But it doesn’t have to be difficult. Simply take some time to reflect on these questions and you’ll be on your way to making a purchase that you are confident in. Contact us at Franchise Eagle, where we can help answer all of your questions and concerns.