With all the economic challenges we face right now, you might be looking to reinvent yourself, either by choice or necessity.
That can mean looking to start your dream business and be your own boss, maybe for the first time in your life.
The idea of running your own show makes the possibility of buying into an established franchise a very attractive option.
But before you get caught up in the dream of financial independence, call us at 212-671-1973 to talk about your options before signing anything. Franchise ownership is not for everyone.
Here are few things you need to consider before you make the investment and commitment to franchise ownership:
Exactly What Is A Franchise?
Franchising is nothing more than a method of distributing goods or services with at least two levels of people involved – the franchisor and the franchisee.
The franchisor provides his trademark or trade name and an established business system.
The franchisee pays a royalty and a fee to do business under the franchisor’s name and system.
The “franchise” is merely the contract between these two levels of people.
Are You Cut Out To Own A Business?
There are some serious questions to ask yourself (and your loved ones) before you take on business ownership, regardless of whether or not it’s a franchise:
- Are you seriously motivated and driven to succeed?
- Do you have confidence in the product or service you want to provide?
- Are you able to motivate and train your potential employees?
- Do you know the industry? What is your level of experience?
- Are you able to promote and sell your business and the brand you’re buying?
Make sure that your family support system is on board with what you’re planning to do. And always make sure that you have an accountant, a banker and an attorney on hand to help you with the necessary start-up paperwork and processes. Getting started the right way can mean the difference between a stunning success and a dismal failure.
So What’s In A Name?
Belonging to a franchise gives you a competitive edge because you belong to a system, and that helps to make up for the cost of being in the system. The main value of franchising is the identity of a brand and recognition of a name that you don’t have to work to build from the ground up.
Remember that the brand’s value is the most important thing in a franchise and your customer is loyal to the brand, not to you as the franchisee. Nobody goes to McDonald’s because they know the franchise owner. They go because they know the brand and they know what to expect every single time they go there.
If you can work within an established system and recognize that you’re promoting someone else’s brand and not your own, then you’ve got a good shot at being a successful franchise owner.
So Which One Do You Choose?
There are so many franchise opportunities available, picking one can seem almost impossible. Around 45% of all retail sales are made by franchises and there are more than 75 industries to choose from.
The best way to make the decision is to think about your own likes and dislikes and what interests you. Make sure it’s an industry that you know something about and won’t mind eating, living and breathing 24 hours a day, seven days a week, because that’s what it will require. Decide on an industry that appeals to you personally and then do your research on the opportunities available.
Check out a copy of Entrepreneur Magazine’s annual top 500 list, the International Franchise Association, or just Google industries that appeal to you.
If you’ve given all these issues full consideration and you decide that a franchise is the next career move you want for yourself, make sure you understand everything that is required of you and the franchisor before you sign on the dotted line or pay any fees.
And just as with any other process with serious potential for legal issues down the line, always consult an attorney to determine what’s best for you. The time has never been better for small business owners to schedule a comprehensive LIFT™ (legal, insurance, financial and tax) Foundation Action Session. Simply complete the form, and return it to info(at)hawkeslawgroup.com. Our Client Services Director will contact you within 24-48 hours to schedule your LIFT Foundation Action Session. Normally, this session is $1,250, but if you subscribe to our mailing list with your first name, email address, mailing address, and mobile number, we will waive that fee.