How do you choose the right franchise from the start?
Once you have decided a franchise
is the right route for you, how do you choose the right one? To choose the franchise that
is right for you and that will fulfill your business dreams, you
must know yourself, your skills, and your dreams and
aspirations. You must begin the process by analyzing yourself. You can start by
investigating into various industries that interest you. Once you have narrowed down
the choices to a few industries, study your geographical area and
determine if there is a market for that type of business. If so, follow a research
plan and begin contacting the franchise companies that you believe
have potential in your area. Any reputable franchisor will send you extensive information
about their business at no cost.
After you receive this information,
which is usually disclosed in the offering circular (also known as
the Uniform Franchise Circular Offering or UFOC), you have to read
it carefully. Read between the lines and do your research. You can go to the library,
look online as well as in professional journals, trade magazines,
reference books, government publications, and annual public
corporation reports. Check with the Federal Trade Commission (FTC), the
state franchise authority, and the local Better Business Bureau to see if there are any problems with the
company. You can also contact local chambers of commerce or business development
organizations and see if they can supply information pertinent to
you research. Try to determine if this company is doing well in terms of its financial
health, management, reputation, and growth prospects.
After you have read the offering circular, ask the
franchisor for a list of franchisees that you can contact. Current franchisees are a
great resource and can give you detailed insight on how the company
is really doing, what to consider before and after you get into the
business, and other critical information. You should visit franchise
stores and corporate headquarters to uncover any information that
will help you make your decision. Assemble a team of
professional advisors, including a franchise attorney and an
accountant. They can help you answer technical questions and will be a useful resource
throughout the research process.
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