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12 Steps To Take When Deciding Whether To Become A Franchisee

Forbes Coaches Council

Starting a franchise operation is an appealing option for many people who aspire to own their own businesses. Purchasing a franchise is often marketed as an easy way to start a business and be your own boss—but is this always the case?

While there are plenty of benefits to becoming a franchisee, it’s essential to weigh the pros and cons before selecting a franchise and making a commitment. Here, 12 members of Forbes Coaches Council share their top pieces of advice for aspiring entrepreneurs who are considering becoming franchisees.

1. Plan With A View Of Becoming Wildly Successful

When you’re doing your homework, take a close look at opportunities to expand beyond your first successful venture. If your growth opportunities will be limited by location, organizational rules or other existing franchisees (friendly competition), you may want to explore other options or consider starting an independent business. - Christine Rose, Christine Rose Coaching & Consulting

2. Choose A Brand You Can Truly Endorse

All too often, people become franchisees of big brands and expect the brand to drive the business by itself. In fact, it’s quite the opposite. Even the biggest brands have to be pushed and sold for franchisee-based entrepreneurial ventures to grow wings and fly. To help you work hard, choose a brand that you like and want to stand for and truly endorse. That will make the hard work a little easier. - Vinesh Sukumaran, Vinesh Sukumaran Consulting


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3. Do Your Homework To Understand All Expectations

What is the ultimate goal? Being a part of a franchise may be a safer investment, but it also comes with the restrictions of being part of a standard brand. If the goal is to grow quickly and be aligned with a brand, then becoming part of a franchise can be a positive move. Probably the No. 1 piece of advice is to do your homework to understand all of the costs, expectations and restrictions. - Denise Russo, SAP

4. Get Clear On Extra Expenses And The Cost Of Customer Acquisition

Get clear on what the extra expenses in launching that franchise business will be and what the cost of customer acquisition is. The best franchisees will have proven lead and customer acquisition systems to grow profitably. - Mike Koenigs, The Superpower Accelerator

5. Write Down Your Short- And Long-Term Goals

Write down your short- and long-term financial and lifestyle goals. Then, determine if franchise ownership can help you achieve these goals. If the answer is “yes,” then the second most important piece of advice is to ensure that you find an experienced professional consultant to help you find the right new business for your best next life as an entrepreneur. - Eddie Rodriguez, The Franchise Tailor

6. Ensure Your Values And Vision Match

As a franchisee, you are dependent on the franchisor’s marketing and product decisions, among other things. Therefore, ask yourself whether the values and vision of the franchise you want to represent match your own. - Michael Thiemann, Strategy-Lab™

7. Choose A Service Or Product That Inspires You

Choose a franchise that offers a service or sells a product that you are inspired by or passionate about. This will be a lot of work, and you will want to make sure your heart is in this adventure as much as your mind and finances. - Natasha Ganem, Lion Leadership

8. Assess Your Competencies And Behaviors

Assess your competencies and behaviors yourself. Then, ask others who don’t need something from you to do the same. Find a neutral advisor without an agenda. Determine which specific skills, behaviors and driving-force motivators are needed to bring about a successful shift in direction and focus. What about how you show up now is transferable to life as a franchisee? What isn’t? Be ruthless in pursuit of honesty and discovery. - Jay Steven Levin, WinThinking

9. Invest Time In Talking To Other Owners

An aspiring franchisee has to make an effort to speak to other franchise owners and ask powerful questions. Collecting information and getting insights from others is essential to finding success. Most of all, finding out what their biggest challenges have been can make a huge difference. My advice is to invest the time to talk to other owners and build relationships. - Michelle Perchuk, MTV Coaching

10. Pay Attention To The Rules And Restrictions

Many see entrepreneurship as an escape from corporate bureaucracy and a way to be your own boss. Franchises are a great way to buy into a winning recipe that lowers your risk. However, that same recipe comes with strings and covenants that contain their own sets of rules that can stifle creativity and restrict the freedom you seek. Pay close attention to the rules and restrictions. - Jim Vaselopulos, Rafti Advisors, LLC

11. Understand Your Ability To Be Profitable

Although a franchise model may sound appealing since it is an established brand, it is important to understand the franchise’s ability to be profitable in the desired location. Big-city locations will have a greater market opportunity than remote settings. You need to be clear on the business’ break-even sales target, and you need to feel confident that there is an opportunity to turn a profit. - Robert Gauvreau, Gauvreau | Accounting Tax Law Advisory

12. Make Sure You’ll Be Working For Yourself

Ask yourself: “Do I want to own a business or do I want to own a job?” There are many franchise opportunities out there that look great on the surface, but in reality, you’ll need to be the general manager at three locations for 80 hours a week to take home a barely-six-figure salary. Do your research and make sure you’ll be working for yourself and not working for the franchise as a glorified employee. - Glenn Grant, Selfassembled Ventures

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