Owning a franchise is often among the most convenient ways to attain business ownership without the trials that accompany starting a brand new enterprise. From branding and naming a business to recognition and advertising strategy, operating a franchise may provide you with the resources you need to ensure a successful start-up.
Identifying Your Goals
Understanding your motivations and goals for buying a franchise are important when determining what type of business to enter; for example, understanding what your minimum income must be, considering how much time you have to devote to the franchise and planning how to finance your initial investments are all important parts of the process.
Choosing a Franchise
Similarly, choosing the appropriate type of franchise is also a valuable part of the planning phase; for example, opening a store that sells only bathing suits is inappropriate for those who reside in the coldest parts of Canada. The product or service that you sell must also be something useful to potential customers throughout the year; understanding the climate, income levels and demographics of your area will help you make these important decisions.
While selecting a franchise to operate seems difficult, finding something that lets you pursue an activity that you are passionate about makes for an excellent business. For instance, those who enjoy baking and working with the public may want to open a cookie franchise, while those who are mechanically inclined may prefer to own a car repair franchise.
Examining the Cost of Franchise Ownership
The arguably high costs associated with franchise ownership reflect what the buyer is receiving for his or her money. The initial franchise fee, the costs of securing a premises and modifying it for the business, licensing fees, inventory costs and a fee for the corporate owner of the franchise to promote your new business can add up quickly; however, these factors may also make it easier to operate the business and turn a profit in the first year. Owners may also incur ongoing costs, including royalties, throughout the time that they are affiliated with the brand.
Making it Work
Although being a franchise operator takes a lot of the guesswork out of starting your own business, you will be subject to certain policies that you did not select for yourself. Ensure that you are satisfied with the details before buying into the franchise of your choice.