3 steps to finding a franchise that’s right for you

If you’ve looked into the process of finding a franchise to invest in, you probably realize that it can be overwhelming. In the U.S. there are thousands and thousands of franchise businesses operating in at least 75 different industries. If you’ve decided that it’s time to stop lining someone else’s pocket and start making money for yourself, you have a lot of work ahead of you. The last thing you want to do is spend hours researching a particular business, only to find out that some aspect is a deal-breaker for you.

Of course, what’s desirable about any franchise opportunity differs from person to person. For example, you may want to work regular business hours. If so, it would make sense to look into companies that sell to other businesses and avoid retail and food franchises that remain open during evenings and weekends. Someone else may desire a lot of customer interaction, and for that person, retail and food would be exactly the types of business to pursue.

That’s why, before you even begin researching businesses, you need to do a thorough self-assessment and determine exactly what you’re looking for. Here are 3 steps to get you started in finding a franchise.

Step 1: What’s on Your List?

Start by writing out your “want list.” What are you looking for in business ownership? What hours would you like to work? Are there particular aspects of doing business that you enjoy (e.g., marketing, selling, networking, managing employees)? What don’t you enjoy? List your strengths and weaknesses, the amount of money you’d like to earn, and the amount you have available to invest in the business. This self-assessment will help you narrow your list of franchises.

Next, take a look at the websites of franchises that interest you and compare them to your “want list.” This should help you quickly eliminate a number of franchises. Does the company have expensive start-up costs that exceed the amount of money you have access to? Does it require you to spend your time on aspects of the business you prefer to avoid? Cross them off your list.

Step 2: the Franchise Disclosure Document

Now that you have a shorter list of franchises to explore, you can ask each for their Franchise Disclosure Document (FDD). Review the following to further narrow your list:

Territory limitations. Is territory available in your area?

Litigation. Review this section of the FDD to understand the relationship between the franchisor and its franchisees. If a number of franchisees have sued or been sued by the franchisor, that could be a red flag.

Failure rates. If the franchisor’s track record doesn’t look strong enough to you, move on.

Be sure you understand the information in this important document before making a decision to go forward with any company.

Step 3: Speaking to Franchisees

By this time you’ve probably narrowed your list to a small number of companies. However, you probably also have many questions remaining. The best way to get answers is to speak with franchisees in the system. You’ll find their contact information in the FDD. Create a list of questions and get on the phone with them. What’s a typical day like? Were there any unexpected start-up costs? How well did the franchisor’s training prepare them to run the business? If you get consistent answers from franchisees, you should get a good sense of what it would be like to be an owner in that system.

It should take 4-6 weeks to go through these steps. To streamline the legwork involved in finding a franchise and get expert advice throughout the process, speak with a FranChoice consultant. There are no costs to you and no strings attached. Why not make that call?