Dreaming about owning a franchise of some company? Wondering how to go about choosing one that will be successful?
We know: 4 Tips for Buying a Franchise
While no one can predict your individual success with any given franchise, there are some basic questions to ask about a franchise before you begin to get serious about investing.
We turned to the Federal Citizen Information Center and the Federal Trade Commission for some hints about what to look for in a franchise to help increase your chance for success.
4 important things to look for before investing in a franchise:
1. A Place Where Everybody Knows Your Name
It may seem self-evident, but itís still true. Companies with high name recognition, a registered trademark, and an established reputation for quality products are likely to draw more customers. Be sure to weigh these factors before you make your decision. (And check with the Better Business Bureau to see what kind of complaint record the company has.)
2. When You Call for Back Up
What kind of support are you going to get from the folks at the central office? Does the franchiser provide training for you and/or your employees? How much and whatís covered in the training? Will you and your employees be ready to compete with similar businesses when your doors open? Ask questions, examine training materials, and test what kind of support youíre going to get.
3. Whoís Who and How Much Do They Know?
Itís one thing to own and operate a successful business. Itís another to own and operate a successful franchise. Find out about the kind of experience your franchiser has in the business AND in managing franchises. You want somebody behind you who not only understands the business, but understands management, support and training as well. You donít want someone whoíll take your money, and then leave you to fend for yourself. Investigate the companyís owners and ask other franchisees what they think about the franchiser.
4. Getting Bigger All the Time
A growing franchise is likely a good thing. It means more name recognition for you and everybody else. On the other hand, a franchise that is growing too quickly may not have the time or resources to provide you with the attention and support you need to make your franchise a success. Find out about the companyís current growth rate and plans for future growth and add that into your equation before buying.