Answers to Your Franchise Questions
Why Should I Own My Own Franchise?
Business ownership offers you the opportunity to take control of your career, finances, schedule and future. You will be your own boss, work hard for yourself, and potentially reap the rewards that business ownership can offer.
How Do I Choose The Right Franchise?
Deciding which franchise is right for you is a huge decision. The right business should not only interest you, but the initial investment amount must fit into your budget and it should enable you to live the lifestyle you desire (do you want more free time, more money, control over your work environment?). Additionally, any business you choose to buy must meet a market demand in your community. If there is no market demand or the area is already saturated with similar businesses, your new business will not have a bright, long future ahead of it. The best advice is to do your research before signing a franchise agreement. Speak with current and past franchise owners and make sure there is in fact a demand for the business in the area you’d like to open the business.
Why Should I Buy a Franchise?
Regardless of whether you have industry or business ownership experience, you can purchase most franchises because they offer complete training, comprehensive support from the home office, a proven business system, and a product or service that has proven itself to be popular and in-demand.
How Much Does A Franchise Cost?
The cost to buy a franchise varies greatly depending on what industry you choose to start the business in, whether the concept requires a storefront, office, home office, or is mobile, what state you buy the business in, and how much overhead your business will require. There are concepts that cost under $10,000 to start and other franchise businesses that require the investor to have millions of dollars in available liquid capital. Additionally, many franchise concepts offer financing or can help you gain financing if you’re interested.
What Is The Franchise Fee And What Does It Cover?
The franchise fee is the initial payment you pay when you buy the franchise and join the system. It is the upfront fee you pay to operate the franchise. It covers the usage of the brand, location selection (if applicable), start up assistance, and in some cases many more services. When you are speaking with franchises be sure to get a detailed list of what the franchise fee covers for the company you are researching.
Does the Franchise Company Guarantee My Success?
Franchise companies build systems and strategies based on success but they do not guarantee any owners success. This is an important thing to remember. Be careful of doing business with any franchise company that guarantees your success. Franchisees success relies on many elements including their commitment to the business, the location and the employees (if applicable), and how well they follow the franchisors system.
Can I Have A Business Partner?
This varies depending on the preferences of the franchisor but yes, most concepts will allow you to have a financial partner who may also be an operating partner, if you choose.
Can I Own More Than One Franchise?
Yes, but again, this can vary by franchise concept. Many franchisors will sell area or master franchises within a certain specified territory. These larger territories can be costly. If you own a single franchise and are successful, most franchisors will be pleased to sell you another territory. If you own one concept and would like to purchase another franchise from a different, unrelated brand, this is usually possible unless you plan to buy a competing concept. Make sure to read the entire franchise agreement and also have an attorney who specializes in franchise law look over the agreement before you sign it. Let your attorney know that you plan to purchase another franchise concept in the future, so he can ensure you won’t have problems.
How Can I Receive a FDD from a Franchise Company?
Requesting more information to franchise concepts listed on Franchise.com can get you started. You will then be contacted by the company. If you are seriously interested in potentially purchasing the concept, they will provide you a copy of their FDD (Franchise Disclosure Document) for review before you make a final decision.
Which States Are Franchise Registration States?
Fifteen states have franchise investment laws that require franchisors to provide pre-sale disclosures, known as FDD’s to potential purchasers. These states are California, Hawaii, Illinois, Indiana, Maryland, Michigan, Minnesota, New York, North Dakota, Oregon, Rhode Island, South Dakota, Virginia, Washington, Wisconsin.