When choosing a franchise chain to buy, it’s crucial to conduct research and comprehend the distinctions between a franchise chain and an independent business. While opening a franchise can be a terrific idea, it runs differently from a company that results from your own unique original idea, so there could be many challenges you’re not ready for.
Naturally, you might have numerous questions regarding how to successfully buy the right franchise. Among these considerations is how to finance your franchise purchase. Once you’ve decided on a franchise and spoken with franchise experts like the team at Franocity, you must assess whether you’re ready to acquire financing approval.
However, narrowing down and eventually choosing the top franchise to purchase might be challenging. So, here are three simple tips to help you choose a franchise to buy. Continue reading to uncover more, including how many people actually own one already!
Franchising in the US – How Many People Own One
It is estimated that there are approximately 733,000 franchise businesses in the US. as of 2018, with recent estimates placing this figure higher. This includes franchises in various industries, including restaurants, retail, service-based and automotive franchises.
It’s challenging to say how many people own a franchise because owners can be people, organizations, or companies. However, the renowned International Franchise Association (IFA) estimates that there are roughly 430,000 owners of franchises in the US at present.
These business owners represent various backgrounds and population demographics, including minorities, women, and veterans. Many people have been able to grow into entrepreneurs and owners of small enterprises through franchising without having established a company from scratch.
However, the success rate among franchises in the US varies according to industry and franchisee, so it’s important to consult Franocity or a company like it to ensure you embark on the right franchise path.
Nevertheless, franchising is associated with a more significant success percentage than establishing a business from the ground up. This is because the franchisor’s assistance and assets offer franchisees an edge over their competition in their market.
Want to learn more about the must-know tips when it comes to choosing a franchise to purchase? Continue reading below for our insider tips on the topic.
Study the Field to Determine the Demand for Products and Services
When selecting a franchise business to buy, it is critical to analyze its sales, advertising, and marketing methods alongside the field and industry to determine its likelihood of success.
Ultimately, you need to establish whether the franchise, its products, services, and strategies are appropriate and lucrative in today’s market and whether they are compatible with your financial capabilities and resources. If the franchise is likely to succeed, it might be time to take the plunge.
Assess the Competitors Offering Similar Products and Services as the Franchisor
One of the most crucial tasks is learning about the local business environment and your would-be competitors. You could gather data utilizing technical surveys and online polls or by simply driving around and observing the quantity and sorts of rivals you have locally, whether individual or franchised.
In addition, visiting the area’s Small Business Development Center (SBDC) can provide vital information such as real estate, market demographics, pricing, and competition, which help assess the local business environment. This can help you establish if the franchise you want to own will work where you want to open it.
Ask the Right Questions
Did you know the Franchise Disclosure Document (FDD) includes critical information regarding the franchise system, such as current franchisee contact information and names?
To gain further insight into a franchise structure, it’s recommended that you speak with many franchises to determine the right fit for you.
Doing this alone can be difficult, but companies like Franocity can give you the information you seek because they have done the groundwork. Below are a few examples of what to ask to gain insight into franchise structure:
- Ask about the advantages and disadvantages of buying a franchise and any hidden costs.
- Inquire with the franchisees regarding the lessons they learned while running their business that they were unaware of before becoming franchise owners.
- Ask for estimates surrounding the time it took the business to become successful, the amount they anticipated paying for it, and how much they spent.
- Ask about the most challenging components of running a franchise and the degree of support it received from the business headquarters. Quality recruitment of workers is also a significant problem, so ask about this too.
- Finally, consider whether they would suggest the franchise to an individual or relative or undertake it all over again, considering their experience. Remember that certain franchisees may be afraid to acknowledge their problems because of their ego. Thus, it is critical to communicate with as many people as possible.
When speaking with a franchise consultant with extensive knowledge of franchisors and their businesses, these questions can be asked.
Get in Touch with Franocity Now to Begin Your Franchising Journey with Reliable Guidance
These tips should help you choose a franchise to buy. If you want to buy a franchise, Franocity can help you. We can connect you with an appropriate business and help you learn everything you need to make the right decision. Reach us here, and we’ll put you in touch with a consultant.