Step 1: Discover

Find out if business ownership and the franchising model is the right path for you.

Franchise ownership is a great opportunity for anyone motivated with an entrepreneurial mindset. At the same time it’s not for everyone nor is every franchise going to be a good investment. We’re here to help you with each step of your journey – so, let's start by taking our Personality Quiz to help determine if franchising might be a good match for you.

Pros & Cons of Franchising

Franchising offers many advantages for would-be business owners, but like anything, there are also some disadvantages that you should be aware of before buying a franchise business. Below are some of the PROS & CONS and you can read more about the advantages of franchising here.

Franchising Pros Franchising Cons
Franchises offer a business “playbook” and the support of a corporate team to help you operate their established business model. Franchises require you to follow their systems and procedures, and can limit the “creative freedoms” of the business owner.
It is generally easier to get a loan for a franchise business compared to getting a loan for a new startup, independent business. Many established franchises are pre-registered with the Small Business Administration (SBA) and qualified candidates can receive fast-track financing through local banks that provide SBA-backed business loans. Big name franchises can have high initial investment costs that limit access to only well-financed candidates.
Franchises offer pre-opening assistance like market analysis, site selection, design & construction, training, and grand-opening marketing programs. Most franchises charge recurring royalty fees, and other fees including marketing fees, training fees, technology fees that can reduce your overall profit potential.
Franchise companies have mass buying power, so product and supply costs are generally lower. Franchise companies can restrict where you can operate your business, the products you can sell, and the suppliers you can use for purchasing products and supplies.
Franchises often have a recognizable brand and a loyal customer base, which can allow for faster startup and growth of the business. Mistakes or poor management by other franchisees can damage your franchise’s reputation and ultimately impact your business.
Franchise companies will often share financial metrics, best practices, and other proprietary information to help you operate a more successful business. Franchisees are often required to share their detailed financial information and other business operating data with the corporate office.
You are your own boss, but you have the support of corporate and a large network of fellow franchise owners behind you. Franchise owners are in business for themselves, but not by themselves. While you own your business assets, you license the brand name and operating procedures from the franchise company. Once your contract ends, franchisors have the power not to renew your franchise agreement.

Identify Your Strengths & Weaknesses

Franchise ownership is not always going to be the right choice for each individual. It is important that you dig deep into understanding your own strengths and weaknesses and how they might impact your success with owning a franchise.

Our Franchise Vision Plan template is a great tool to help you explore your personal and business goals and clarify your vision for business ownership.

Why Some People Buy Into a Franchise

Want to control your own destiny? Are you a risk taker and like to challenge yourself? Then maybe you are ready to take on small business ownership. Franchising offers tons of great opportunities for entrepreneurs like you. Whatever your motivation, here are a few good reasons for opening a small business.

  1. You can see the opportunity in a marketplace.
  2. You have the time, patience, and resources to invest.
  3. You enjoy taking on new challenges.

Need more motivation? Check out our article Is Small Business Ownership Right for Me?

Learning the Lingo

Like many industries, franchising has its own lingo and important terms you should become familiar with. Start learning the lingo below and under the EDUCATE step or you can read more about common franchise terms here.

Outside salesperson or firm paid for by the franchisor to find potential buyers
The time in the process where you are invited to the franchise corporate office to meet the team and learn more about the company
Franchisees, aka “Zees”, refers to the franchise business owners and what you would be called. Franchisors, aka “Zors”, refers to the franchise company that you are purchasing the business from
A critical measurement of the satisfaction of the franchise owners within a brand. FSI was created by Franchise Business Review in 2007 and is represented on a 100-point scale
If you purchase more than one franchise unit you would be a multi-unit franchisee
A designated area for a franchise unit, many franchisors provide an exclusive territorial agreement to prevent conflict between franchisees

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