How to Buy a FranchiseReturn back to main page
Should I Buy a Franchise? Is it a Suitable Option for ME?
The benefits of franchise consulting. How to buy a franchise that is right for you
Our initial focus is to determine if buying a franchise is APPROPRIATE for YOU. The benefits to having a business include financial freedom, independence and the potential to build wealth. There are also financial risks, which need addressed and understood. The first part of our franchise consulting process is to determine suitability. Watch this video to learn more about our approach:
How to Get Started With Your Franchise Research
Buy a franchise that fits within your ideal “lifestyle”
Most tend to start their research by looking for information on specific concepts. While that’s not necessarily a bad approach, we think it’s an inefficient way to buy a franchise. Here are a few reasons why:
You might really like a concept… but what if they don’t want to open in your location?
What if you lack the required skills to own and operate that franchise?
What if the required investment is not suitable for you?
What if the business model can’t generate the income you need?
During our franchise consulting process, we take the time to address these and many other questions to help you create the ideal LIFESTYLE. When you buy a franchise… you are looking to create a lifestyle. While the financial requirements are important… it’s equally important that you enjoy owning and operating the business.
Do I Need Experience to Own a Franchise?
A good franchise system will teach you the business
One of the benefits of a good franchise system is you don’t necessarily need to have a technical experience in the business. Having sales, management and customer service skills are definitely a plus. A good system should provide you with the proper training and support. When you buy a franchise, you’re buying the rights to operate their business model. The should teach you all of the technical knowledge on how to run the business. Through our franchise consulting experience, we find that the the best franchisees are open minded, willing to follow a system, have strong interpersonal skills.
How Can Your Franchise Consulting Practice Help Me Buy a Franchise that is RIGHT for ME?
Providing Direction and advice to help you buy a franchise that meet your objectives
Here’s a list of some of the questions to be considered before researching specific concepts. In our franchise consulting practice we specialize in helping you identify important factors that people tend to overlook in their research. This is how we help you buy a franchise that makes the most sense for you. We offer more services in our franchise consulting practice than traditional franchise brokerage. Our process is designed to create a target profile for businesses that can achieve your ideal lifestyle. During this discovery we will help uncover skills you never thought you had and reveal franchise opportunities you never knew existed. Here are some of the important questions to consider:
When do I want to open my business?
Where do we want the business to be located?
Do I have to own a business that’s prestigious?
How important is brand recognition to me?
Do I prefer working in an office, a retail center, can I work from home?
Am I comfortable with sales?
Am I comfortable managing employees?
When do I want to work? Nights? Weekends? What hours of the day?
Should I buy a franchise?
How much income do I need to support my lifestyle?
What is an appropriate level of investment for me?
How much of a cash reserve will I need to cover personal expenses as the business grows?
How will I finance the purchase of the franchise?
What resources will I need in need in terms of legal and financial advice for my business?
Important Information to Know About Franchise Documentation
learning the basics of required franchise documentation can help you with your research
Franchise Disclosure Document (FDD) - All franchises are required to provide you with an FDD. This document provides valuable information regarding all aspects of the business including costs, responsibilities for both you and the franchisor, etc. It’s highly recommended you review the FDD with a qualified franchise attorney before you buy a franchise.
Franchise Agreement – This is the agreement you sign when you purchase a license to operate the franchise. A copy of the Franchise Agreement is included in the FDD. It’s highly recommended you review the FDD with a qualified franchise attorney.
Item 19 – Financial Performance Representation (FPR) - This is one of the most important items in the FDD. This is the only place where a franchisor can provide any financial information regarding the performance of the business. Franchisors are not required to provide and FPR. It’s estimated that less than 30% of all franchise concepts make and FPR. When you buy a franchise, the more information of earnings performance, the better.
Validation – This is the process where you speak with current and former franchisees. This process can teach you a lot about what it’s like to operate the business. A list of all current and former owners should be included in the FDD. Some helpful questions may include: Are you happy with you decision to buy a franchise? If you had to do it all over again would you buy this franchise?
Discovery Day – This is when you visit the headquarters of the franchise. It’s an opportunity to meet the management, tour current locations and see if you are comfortable with the business. This is typically the last step when you buy a franchise.
Franchise Broker – A franchise broker is someone who is paid a commission to sell a franchise. They are typically paid a percentage of the overall franchise fee. You don’t need to have a franchise broker to buy a franchise. Some concepts prefer not to work with brokers, while others choose to work with brokers. When you work with a franchise broker their is typically no mark up for there services. The benefits of a broker include having more industry knowledge, access to concepts not readily advertised. It’s a personal choice whether you choose to work with a franchise broker. Take the time and test their knowledge to make sure you are comfortable in what they have to offer.
Franchise Consultant – While this term is used liberally, a franchise consultant is someone who provides more services than a traditional broker. A franchise consultant will typically receive commissions equal to that of a broker. In addition they may charge additional fees and services for work including: business consulting, financial analysis, raising capital, marketing and sales strategies, and outsourced third party brokerage.
Business Plan – Before you buy a franchise and sign the Franchise Agreement and paying your fees it’s highly recommended you write a detailed business plan. This should include financial projections and a list of working capital needed to fund the business. If you are not familiar in writing business plans there are many free resources available on the internet. We also highly recommend you work closely with a qualified CPA, accountant and financial advisor to help review your business plan.
I Want to Learn More About How Your Franchise Consulting Practice Can Help ME!
If you’re serious about buying a business and want to learn more about how our franchise consulting and brokerage services can help you please call 866 934 7167 or email us at