Buying a Franchise Guide

There's a big difference between "buying" something and "being sold" something. When we go to the grocery store, we "buy" groceries because we need them. If we go to a TV dealer to buy a 19 inch color TV and come home with a 42 inch home theater, it's usually because we were convinced that we needed it. In purchasing a franchise, it is vital that you "buy" and not get "sold".

With thousands of franchises in dozens of categories at all price ranges, it is obvious that you must start a process of elimination to narrow your search. To help decide on what is the best franchise to buy, you must develop your criteria in four main areas; Finances, Category, Lifestyle, and Company.

Finances - Franchise companies have liquid capital and net worth requirements for individuals contemplating the purchase of their franchise, and generally will not grant franchises to individuals not meeting these figures. The logical starting point is to determine how much investment capital you have to dedicate to buying a franchise. A personal financial balance sheet, detailing your total assets and liabilities, will determine your net worth in the eyes of the franchise company. Remember, however, many franchise companies offer financing or can arrange it through third parties.

Category - Apart from finances, the category is second in importance when buying a franchise. What do you like? What are you good at? What do you really want to do? Food, recreation, entertainment, auto, retail, printing, training, children´s services, employment, cleaning, health, business services, etc. You´ll have to spend some time making the determination as to what kind of business will suit you the best. Many franchise companies have excellent training programs designed to help you make the transition, even if you do not have any prior experience.

Lifestyle - Take into consideration the requirements that will be placed on you by different types of franchises. Businesses such as retail and food involve long hours, and generally operate seven days a week. If you place a high value on your family life, you may be best suited with an opportunity that will require less of you time. Industrial cleaning franchises will have you and your crew busy well into the early morning hours. Roughly half of the franchise companies allow you to be an absentee owner, while others require you to take an active role in the day to day operation of the business. Do you prefer businesses where the customers come to you, or where you have to go out and find the customer? Are you suited better to businesses that you would have primarily administrative functions, or do you want to be in the center of the action? You must consider how the requirements of the business will affect your lifestyle when buying a franchise.

Company - The last item to consider when buying a franchise is choosing the best company to work with. Once you have identified a category you like and that you can afford, it makes sense to research all franchise companies that are direct or indirect competitors in that line of business. It is critical that you pair up with a franchise company that has the same goals, desires, and dreams that you have. Look for a strong, experienced, dedicated management team committed to providing you with everything you'll need to be successful.