Nowadays, franchising has become the primary alternative for setting up a business. In fact, in the past five years, the average franchise industry growth has increased by 1.1%. Currently, the market size is $165 billion with 97,442 number of businesses. With such great figures, the franchise continues to attract, each year, many entrepreneurs that are eager to begin a new business while limiting financial risks.
But how to assure the success of this type of contractual collaboration? For this, follow the step by step plan given underneath when looking for “Franchise for sale”.
Follow The Proper Step By Step Plan
Our experience has allowed us to develop a logical and planned process for buying a franchise. We describe it briefly below. Follow this process step by step so that you progressively evolve in your purchasing journey while analysing it as you move forward in your process.
Note: It is essential to follow the steps in the order they are presented below, as each of them relies on the knowledge gained in the previous steps.
Step 1 Gain Basic Knowledge About Franchising
- Take a training seminar dedicated to “best franchise to buy.”
- Consult books that deal with franchising.
- Read various magazines and business documents related to the franchising industry.
- Discuss and exchange ideas with competent people actively involved in business and franchising.
Step 2 Self-Examine
Examine your current situation and your goals to find out answers to the following questions:
- In which sector of activity are you willing to invest in business?
- How much money do you have available to invest in a franchise?
- Are you willing to risk the assets you have by investing them in a franchise?
- What is your borrowing capacity?
- What is your territorial mobility?
- What is your level of ambition (what are your goals for the next 5 to 10 years)?
Step 3 – Design an Evaluation Process
Using the results of the self-examination completed in step two, establish an evaluation indicating precisely what you can afford to do and what you are looking for – in particular:
- The sector of activity targeted.
- Assets available for investment.
- The amount of the loan that you are ready and able to afford.
- The location and territory where you are willing to operate.
- Other desired characteristics of the franchise you wish to acquire.
Step 4 – Look for Franchisors
Once you have reached the fourth step, look for franchisors whose data corresponds to the evaluation that you have established in the previous step. You can seek such franchisors in particular by the following means:
- Consult the small investment business directory.
- Visit franchise business lounges when such events are available.
- Find out about the franchises available in your area by reading newspapers and business magazines that advertise franchisors.
Step 5 – Select a certain number of franchisors and hold meetings with them
Select franchisors (2 to 4 if possible) who meet your criteria. Then hold preliminary meetings with them to check whether their networks correspond to the evaluation you have established. During these meetings, ask the franchisors the questions you have and check their answers thereafter.
Also, you should ask each franchisor if they have a disclosure document. If so, it is crucial to obtain a copy, to read it carefully and to have it read by your legal and financial advisers. This document contains a large amount of data which can be very important in your decision making.
Finally – A Help Tip – Buy a Franchise Together
For any business creation, you can buy your franchise with two or more. That is to say, associate with a trusted person. It can be a friend, a former colleague or a family member. Also, note that some brands strongly advise buying a franchise with several to divide the risks by not making carry all the weight of its project on only one person’s shoulders.