Tom’s Franchise Information Blog
You are considering a franchise. Determining what is the best franchise business opportunity for you is no easy task. Usually, when someone thinks of franchising they think of restaurants. That is because of the megalith food franchises like McDonald’s, Subway and Pizza Hut that have become a part of our everyday lives. However, there are thousands of franchises available in every conceivable industry. When deciding which franchise to go with, take into account your background, personality, skill set and investment range. There is a perfect-fit franchise for you. The trick is to find it.
Background
Have you spent your career as a manager or a worker? If you are a “hands on” person, consider an owner-operator service franchise. If you prefer management, consider retail, food service or consulting.
Personality
The key question here is, are you an entrepreneur?
Are you frustrated for someone else?
Are you tired of some else deciding what you are worth?
Are you confident you can take competition head on and do it better?
Are you comfortable with being the boss and making decisions?
Are you willing to work long hard hours for a few years to build equity in your future?
If you answered “Yes” to the above questions, you are a great candidate for entrepreneurship.
Once you have decided business ownership is for you, consider how your personality should affect your business choice
Are you aggressive or laid back?
Are you outgoing or introverted?
Are you analytical or decisive?
There is no “right” personality. The key is to match your personality to your business choice.
Skill Set
Most franchises state “no experience necessary”. That is one of the best reasons to partner with a franchise. They bring a proven successful system, training, coaching and consulting to enable the novice to operate like an expert. However, you should still seek an industry within your general skill set. If you are not very mechanical, don’t look at a handyman franchise. If you are not good with numbers don’t look at a tax service franchise. But, if you are in an industry you are comfortable with, the franchise support team should be able to bring you up to speed.
Investment Range
Everyone wants a McDonald’s, but to qualify you must show a $2 million net worth - and your first outlet can easily cost you $1 million. An alternative might be the newer up and coming burger franchise you can open for under $200,000. If that is still steep for your budget, there are great businesses you can start for under $20,000.
Often, first time entrepreneurs get their startup capital from an SBA loan or a home equity loan. It is best not to strap your young business with too much debt service. A rule of thumb is to keep debt service under 10% of projected revenues. Many first time entrepreneurs roll their 401k into their new business to give them startup capital without debt payments. If done properly there are no taxes or penalties, and the new entrepreneur can draw an immediate salary.
The retirement account can be rebuilt as the new business becomes profitable and builds equity. Anyway you look at it, entrepreneurship is not for the faint of heart, but with courage, creativity and some good common sense, it can be an enjoyable and profitable future.
Ed Wills is a franchise and small business startup consultant with WFA Franchise Consultants. He specializes in helping people identify business opportunities that will help them reach their personal and financial goals. He writes, speaks and coaches on a variety of business and success topics. You can learn more about his services or request a free consultation at http://www.WFAFranchiseConsultants.com.
Franchising is one of America’s leading industries, with annual sales nearing one trillion dollars. It also represents about 40% of all retail sales in the United States today. Franchising is not a business, per se, but rather a way of conducting business. If you have a business and think it may be a candidate for franchising, ask yourself these questions:
Do you have a successful business?
Is there a “system” to the business that is replicable - or is it you?
Do you want to expand your business?
Are you able and willing to manage and work through others?
Are you willing to share information about your business with others?
If you answered “yes” to each of these questions, you may be a candidate to franchise your business. While the reasons to franchise any particular business may be different for each person or organization, a common thread is the opportunity to expand your business brand and generate royalty revenue from each additional location.
For example, if you opened franchised business location, and it did $500,000 a year in sales with a 5% royalty rate, this location would generate $25,000 in additional revenues for your company - not including fees for the sale of the franchise. If you opened 25 franchised locations, your ongoing revenues would exceed $625,000 per year as a small franchisor. You might also gain certain economies of scale when dealing with your suppliers.
Franchising is regulated by certain states and by the Federal Trade Commission. The advantages for you or your business might be worth exploring as you look for ways to grow your business in today’s competitive climate.
By Thomas R. Brule
Thomas R. Brule
e-mail: BruleT@gmail.com
phone: (216) 789-4229
When looking for industries that offer the best opportunity for future growth, the same businesses appear, whether it’s from the Bureau of Labor Statistics, Department of Commerce, franchise industry experts or independent business websites. Invariably, home healthcare and personal fitness businesses are at or near the top of these lists.
Since there are a number of franchise companies that operate within these business sectors we wanted to identify those that met certain standards. If you have an interest in any of the franchises be sure to thoroughly investigate each franchise and perform your necessary due diligence. We are not recommending any particular franchise but rather are indicating those that have certain positive characteristics.
In selecting the Ten Franchises poised for growth we used the following requirements:
· The franchise has shown increases in new franchise growth for 3 consecutive years
· Each franchisor offers some form of financing
· Investment requirements for each franchise appeals to small and large investors
· The franchise fits into the home healthcare or personal fitness niche
· The franchise has been in business at least 7 years
The Ten Franchises that met these requirements are:
Home Healthcare
· Home Instead
· Right at Home
· Senior Helpers
· Com Forcare
· Home Care Assistance
Personal Fitness
· Golds Gym
· Fitness Together
· Snap Fitness
· Anytime Fitness
· Planet Fitness
We hope you’ll find this analysis useful. You can use these same guidelines to compare franchises in other industries. The information you’ll need to do your comparison is available from the franchisor. Finally, remember that the best source for evaluating a franchise program is to speak with existing franchisees.
