Thinking for starting a business? Why not Franchise?
If you’re dreaming of starting a business but you aren’t sure what quite business to start—or where to start—the ideal solution could also be to shop for a franchise.
WHAT IS A FRANCHISE?
A franchise (or franchising) may be a method of distributing products or services involving a franchisor, who establishes the brand’s trademark or brand name and a business system, and a franchisee, who pays a royalty and sometimes an initial fee for the business under the franchisor’s name and system. Technically, the contract binding the 2 parties is that the “franchise,” but that term more commonly refers to the particular business that the franchisee operates. The practice of making and distributing the brand and franchise system is most frequently mentioned as franchising.
Who are today’s franchisees?
Some 62% of franchisees in Guidant’s survey are baby boomers, while 30% belong to generation X. Just 8% are millennial. One reason for the low level of millennial involvement: most millennial can’t yet afford the high monetary value of opening a franchise. Since franchisors expect franchisees to place a big chunk of their own money into startup, the typical franchisee must have about 5,00,000 lakh liquid capital to take a position.
Reflecting the financial means needed to shop for a franchise, franchise owners generally have a better level of education than the typical small business owner. Some 85% of franchisees have advanced degrees: 47% have a bachelor’s degree, 25% have a master’s degree, and 11% have an associate’s degree. Of course, 15% do fine with a high school or GED degree.
The most popular franchise industries
The businesses are most popular among franchisees? Overall, franchise trends mirror trends in business generally. Here are the five hottest franchise industries:
- Health/beauty/fitness franchises
- Food and restaurant franchises
- Business services franchises (such as tax preparation or marketing)
- General retail franchises
- Home services (such as lawn care or maid services)
Franchise Tips for purchasing A Franchise
When it involves buying a franchise, there are several belongings you got to know before you start the franchise discovery process. There also are a couple of things that you simply got to realize as you’re watching franchise opportunities.
With 3,500+ different franchise opportunities to settle on from, it’s important to be ready to manage the method of trying to find a franchise business that creates sense for you.
The Top 10 Tips for Buying A Franchise
- Start the franchise exploration process by watching what the business skills are that you simply bring back the table.
- Determine if you’re comfortable using someone else’s systems and procedures.
- Confirm you’ve got the entire support of your family before you create a advance a franchise business.
- Do a net worth statement before you even consider seriously looking into franchise opportunities.
- Once you find franchise opportunities that interest you, ask as many franchise owners as possible. And confirm you ask them many questions.
- Don’t rush through the research process. Be thorough, and ask both happy and unhappy franchisees. Be willing to debate what you hear with the franchise company’s sales representative.
- Plan to reading through the whole Franchise Disclosure Document (FDD). Then you would like to read it again.
- Once you have narrowed your search right down to one franchise opportunity, you would like to take position touch money to go to the franchise company’s headquarters.
- Once you revisit from your headquarters visit, return through your notes. You’re getting to want to ascertain if there’s anything you missed. If not, it’s time for you to rent a franchise attorney to seem over the FDD and therefore the franchise agreement.
- Do a gut check. Confirm you’re able to become a franchise owner.
Investing during a franchise or becoming a franchisor are often an excellent opportunity. But before you decide on any franchise investment and sign any franchise agreement, do your homework, understand what the franchise system is offering and obtain the support of a professional franchise lawyer.