Buying A Franchise: 5 Essential Steps To Take Before Investing
Buying a franchise can be a profitable business venture when chosen wisely. Here are the steps you need to take to ensure you choose a smart investment.
Assess Your Skill Set
As a franchise owner, you will be the boss, managing, mentoring, and evaluating employees to keep your business running successfully. Previous leadership experience is vital, as is the ability to adapt and learn to grow with your new business.
Identify Your Passion And Long-Term Goals
While anticipating your financial future is a major factor in buying a franchise, an equally important factor is personal fulfillment. Are you going to enjoy the work and look forward to running your business every day? Are you going to find value in the products or services your business provides? The best investment will align not only with your financial goals but also support your personal beliefs and values. A combination of the two will provide a more fulfilling, longer-lasting formula for success.
If you don’t have a long-term personal plan, laying out one before you think about entering a franchise commitment is essential. Entering into a franchise contract is a partnership, complete with all the joys, rewards, headaches, and heartaches. Franchise agreements last anywhere from 5 to 25 years, with an average of 10 years. Consider your ideal work-life balance and seek out franchisors who prioritize the right mix.
Calculate Your Investment Level And Future Profitability
Understand all of the fees involved with buying a franchise and have enough capital to cover them. When buying a franchise, be aware that you’ll need to pay a franchise fee, which provides you with your license and the key to open the door to all of the business’s operating systems, earned wisdom, and branding. The brand is a known entity with a built-in following, and paying the franchise fee gives your business automatic credibility. Also, factor in franchise-specific fees, like royalties, when creating your business plan and pro forma.
Within any industry, the business model you choose will affect the cost of opening your franchise. Tide Cleaners offers a wide range of franchise types but begins with a Tide Cleaners Plant Store, which allows new franchisees to establish their business with our largest, most interactive format. From there, owners can open additional Plant Stores and Drop Stores designed to suit various markets and neighborhoods to optimize service.
Many factors come into play when predicting the future profitability of your franchise, including location, market demand, and your ability to attract and retain customers. Bear in mind any and all future possibilities when considering your investment so that you can be prepared for short and long-term outcomes. As part of the essential, laundry and dry-cleaning industry, Tide Cleaners presents a sustainable, long-term investment opportunity for qualified franchisees.
Speak With Franchisees And Assess The Franchise Disclosure Document
Contact franchise owners whose business models interest you and get a sense of their experiences. They can provide information about the management team, franchise fees, and other day-to-day insights about what your future may look like within a particular brand.
Further narrowing your focus, review the brand’s Franchise Disclosure Document (FDD). Item 19 of the FDD will give you detailed information about the franchise system, including earning statistics. Not all franchisors provide Item 19, but when they do, it can help you get a sense of what to expect in terms of financial return on your investment.
Get To Know The Franchisor
Once you have identified a business model you are passionate about, is within your budget, and presents a strong outlook for the future, get acquainted with the team behind the brand. Get acquainted with their operational procedures, marketing approaches, organizational structure, and how they will support you as you get your business off the ground.
Comprehensive training and ongoing support are essential factors to consider when buying a franchise, and Tide Cleaners franchisees benefit not only from the strength of a brand trusted across the world as the top name in cleaning, but unparalleled support and growth potential that sets each franchise owner on track for long-term success.