subject: Four Tips On How To Buy A Franchise [print this page] Four Tips On How To Buy A Franchise Four Tips On How To Buy A Franchise
The process of buying a franchise can be very confusing and quite overwhelming. If you are a first-time business owner or first-time entrepreneur, you might not know how to buy a franchise. What this article will do for you is give you 4 rock-solid tips on how to buy a franchise.
The natural thought process of most entrepreneurs is to find a business that they are passionate about. I couldn't agree with you more. However, if you base your decision solely on what you're passionate about then the likelihood of you making a critical mistake goes way through the roof. Here are 4 tips on how to buy a franchise.
1. Get a reality check - Before you sign on the dotted line, take a step back and get a clear understanding of exactly what your current financial situation is. Make sure you know exactly how much money you have to invest and how much time you plan to spend on your business. What most rookie business owners do is they make the mistake of believing they are better off financially than they really are. It's important in business to not mix business with emotions.
2. Understand the FDD - The Franchise Disclosure Document, otherwise known as the FDD, outlines everything you need to know about the franchise you are considering. The FDD will tell you everything that's required of you by the franchise company and everything that the franchise company is required to do for you. The FDD will also outline any current and past litigations the franchise company is involved in. You have a 14 day window to review the FDD document before you are able to put any monies down on the franchise. Use this time wisely and carefully to do your due diligence.
3. Consult with franchise experts - During your 14 day "cooling off" window, it is wise to consult with franchise experts. They are there for a reason. You should first consult with the franchisor attorney to see if owning a franchise is right for you. Next, consult with a franchising accountant to understand all the tax and legal advantages and disadvantages of owning a franchise. Spending time with these professionals will ultimately save you time and costs on the backend if you ever have to deal with costly litigation.
4. Alignment your current goals and values - After you have completed the first three steps, make sure you choose a franchise that is in alignment with your current goals and your current values. For instance, if you desire to have nights and weekends off, do not choose a franchise in the food industry where nights and weekends are the biggest money makers for that business. If your goal is to spend more time with your family, do not choose a franchise that requires you to travel extensively away from her family. On top of that, choose a franchise that you're absolutely passionate about.
