9 Questions You Should Ask Yourself Before Investing in a Franchise
Should I invest in a franchise? Here are nine important questions to ask yourself first:
- Do I have the right personality?
Are you OK with following strict rules and procedures? How has rule-following worked for you in the past? Imagine walking into your favourite fast-food chain to order pizza, only for the server to tell you that they are discontinuing pizza and selling chairs instead. Franchises are meant to be replicated. In franchising, it’s important that a customer can have the exact same experience at one location as they would at another halfway across the world. If you can’t or are unwilling to follow a strict system, the last thing you want to do is force yourself into a role you’re not the right fit for.
- Am I a people person?
Whether you’re dealing with support suppliers, customers, or employees, as a franchisee you’ll be interacting with people all day, every day. If you require a lot of alone time or prefer working independently, business ownership may not be the best career path for you.
- Am I interested in developing new skills?
Ongoing training is part and parcel with most established franchise systems. Franchisees need to learn a number of new skills to stay up-to-date. Franchise owners tend to wear a lot of hats too, dealing with everything from bookkeeping, customer relations, and sales. It’s important that you enjoy developing new areas in your expertise.
- Can I be fully dedicated to a franchise?
There’s no sugarcoating here: running a franchise takes a lot work. Even with the support of a franchise system, you’ve got to put in a considerable amount of time and effort to really build a business that you’re proud of.
- Does the franchise have a track record of success?
One of the reasons why the franchise model is so popular has to do with its proven track record of success. However, no individual franchise is guaranteed to succeed. Make sure you ask hard questions, examine the data, and do your due diligence before diving right into the business.
- How much money does it take?
Add up your assets. Add up your liabilities. While investment costs vary depending on the franchise, there are still big expenses you need to consider (initial fees, royalty fees, commercial space leasing, etc.) Sort out how financially viable a franchise investment is for you and the steps you need to take (e.g. loans, savings) to get the cash you need.
- What do franchisors look for in potential franchisees?
On the Franchise Canada Chats Podcast, Wayne Maillet, a leading franchise consultant with over 25 years of experience with the franchise model discusses the top five qualities franchisors look for in a franchisee. Some of them that were mentioned include people who are hardworking and passionate about growing a business.
- Have I done all the necessary research?
One of the best places to start your research is with Franchising Tutorials. Step-by-step, these tutorials arm you with the franchising basics. By the end, you’ll know about Franchise Operation Manuals, Franchise Advisory Councils – which Maillet talks about in the Franchising Demystified episode – Franchise Agreements, and so much more! Don’t forget to speak to a franchise consultant and lawyer too.
Then, grab a pen and paper and write down all the professional skills and experiences that you bring to the table. Write down what you’re interested in and what can kind of business you’re looking for (home-based or a traditional franchise location).
- How do I find the right franchise?
Once you’ve dug deep and honestly answered the questions above, a resource like Lookforafranchise.ca is a great place to find franchise opportunities that fit your preferred investment level, location, and/or sector. Click the ‘Request More’ button and begin your franchise journey!