With the increasing use of technology in industries, midlevel employees are slowly being replaced with computers. With this reality, many middle-aged people are looking for a second chance at their careers, a “do over” if you will. What’s attracting several of these individuals is the prospect of owning a well-known franchise.
Unlike small businesses, franchises offer a great deal more stability and security. Instead of starting from ground zero, you can gain leaps and bounds by buying into an already established brand. There’s the opportunity to be your own boss and operate under an existing trademark that generates instant recognition. Mom and pop shops are all well and good, but the failure rate for franchises is significantly less.
Personal Aspects to Consider Before Purchasing a Franchise
If you’re seriously interested in getting involved with a well-established chain, you need to reflect on some personal aspects of your life before you jump into franchise business ownership.
1) Are you willing to drop your other priorities? In many franchise agreements, there is a clause that requires you to devote a substantial amount of working time to your franchise operations. Restaurant and retail franchises often require a lot of hands-on work; you can expect many grueling hours on evenings and holidays, and you can forget about those plans you made for next weekend. If you’re heavily involved with a hobby or your family, you may become frustrated with the lack of attention you have to give them.
2) Do you like dealing with the public? Almost all franchises involve dealing with the public; there’s no way of getting around that. Are you prepared to deal with rude, obnoxious, shrieking customers? Some days are going to be like that. Do you have the patience and ability to let those complaints go at the end of the day?
3) Are you planning on staying put for decades to come? If you buy a franchise, you will be limited to a specific territory and will be forbidden from opening stores or advertising outside of its boundaries. You will essentially be stuck in one place, so you better make sure you like it.
Many people have lived in more than one location throughout their lives, and you should ask yourself where you want to be for the next while. Franchise agreements can be enforced for several years at a time. Can you stay in one place for that long? You may want to consider moving back to your favourite town or look to a retirement community and open your store there.
Read More: The Legalities of Buying a Franchise
Business Aspects You Should Consider Before Buying a Franchise
Along with your personal preferences, you need to carefully scrutinize the business you’re thinking of joining and the process of how to buy a franchise.
1) What is the consumer demand? A franchise—or any store, really—is only successful if their products or services are in demand, and that will be generated by quality products. If it isn’t there, the business won’t run for much longer. You need to know if the demand will continue. Also important to consider is any competitors or the emergence of any in your particular market.
2) Are there any plans for growth? Does the franchisor have a plan for targeted expansion? You should find out if your franchise will be located where the traffic and demand are likely to be, along with the target market for growth. Finding out if you have exclusive rights to the franchisor’s product in the area would be a good idea, too.
3) How much will this franchise cost you? Buying into a franchise isn’t a cheap investment. It requires a significant amount of money upfront. Therefore, you need to know beforehand the total cost that your franchise will run you. Does it include the equipment you need, inventory, or advertising? Are there other costs that aren’t included or may be hidden?
Franchises are a big investment and require a lot of attention and involvement. Before you make the jump into business ownership, ensure your personal preferences are a suitable fit. Take the time to research the business—its future plans and financial commitment—too, before you say yes.