A franchise opportunity can be a great investment, not only in a business but in yourself. By planning and following the right steps, you can turn a franchise opportunity into a profitable model that makes you a ton of money, a better leader, and a higher profile business investor.
To get the experience offered by the best franchises and make this investment work, you have to know how to use this opportunity properly. This is a short guide to investing in a new franchise, how you should plan beforehand, make the purchase, and what you should do as a new franchisee to make this work as an investment in yourself and your financial future.
Make a game plan
If you Google “what are the best new franchises?” and pick the first one and go with it, you’ll be doing yourself a disservice. Not everyone is fit for the highest paying franchises or even able to pay the ultimate costs of running one.
You need a game plan beforehand that includes some basic understanding about how to begin the process of owning a new franchise and running it successfully.
1. Be aware of your goals and limitations
When you buy into a franchise, you’re not only buying a building and the responsibility of running a business: you are buying into a brand to become a part of that brand.
If your goal is to learn every rule and procedure of an established brand and run it exactly as the franchisor delegates to you, you could be a good match for your franchise opportunities. Contrarily, if you know that you aren’t patient with new employees or that you like experimenting with established procedures, you may want to reconsider this opportunity.
Being aware of your limitations can help you grow and change so that you can take advantage of a new franchise. You must know yourself first.
2. Do your research
Every brand is different. Even the area that you’re looking in could change the viability of one brand over another. When choosing the brand that you’ll franchise, you must plan in terms of the viability of that franchise in the area you plan on buying in.
For instance, an area already flush with fast food may not be a profitable place for a new Wendy’s franchise; you may want to look into a BBQ chain restaurant instead, based on the region’s history and current market.
By doing the proper research beforehand on what works and fails in your area, you can give yourself a better chance of turning your franchise opportunity into an investment.
Manage your finances
Once you’ve got a plan in terms of which franchise is right for you, you need to do some serious financial management before you start the process of franchising your restaurant. A few key financial mistakes prevent new franchisees from taking advantage of these opportunities for self-investment and instead put them in a situation that they regret.
1. Plan for the whole package
Owning and operating your own franchise requires a lot of financial planning beforehand. Most new franchisees don’t know how much is required to get a new franchise up and running.
Of course, there’s the actual purchase of the brand, which you can plan for. However, many new investors anxious to take advantage of their franchise opportunity don’t think about the franchising fees. The best franchises have the largest fees, some reaching as high as $100,000, just for the licensing.
2. Look ahead
Even if you think you have enough money to start the franchise, you need financial backup in case things go wrong down the road. If your new BBQ chain restaurant starts to fail and you don’t have any financial security, that brand could become a serious burden to you that costs you another mortgage or worse.
Since no one does everything perfectly on the first try, you have to plan for some failure, and have at least some money invested for a rainy day when your fledgling franchise might need it.
Choose the right location
After financially preparing for an investment in your chosen franchise, you may think that one location is as good as another. However, to take full advantage of your franchise opportunity, you need to do the proper research beforehand into different locations.
Scouting out the most promising ones yourself is a good starting point. You need to check them for their availability from the street, the level of traffic that passes your future business, and even for visibility: whether other buildings or trees or the shape of the road could prevent people from seeing your franchise.
Finally, to use your franchise opportunity as an investment in your future, you have to follow the procedures set forth by your brand.
When you buy into one of the best new franchises, they already have an infrastructure set up for how the business is supposed to run, how its marketing paradigms operate, how its employees are trained, and so on.
By following these procedures – all in an operating manual and training guide that you get upon purchasing the license – you’ll be able to get in good with your new franchisor and make the most use of this opportunity for business growth as an opportunity for personal growth as well.
To make the most of your franchise opportunity, not only as a financial investment but as an investment in your future as a business owner, you need to follow a few guidelines.
The most important is the research and financial planning you must do beforehand to make the most of your new opportunity and get the best terms as possible on your licensing contracts.
The next is to choose the right location for the right franchise and follow the appropriate procedures. Remember, you’re not just buying a building: you’re buying a brand.
If you can successfully represent that brand, buying into a franchise may be an opportunity not only for financial advancement but for personal growth as well.