What To Know Before You Buy a Franchise

Dec 18, 2017

Tips for Becoming a Franchisee

Becoming a franchisee requires much research into opportunities. You probably have already educated yourself on what a franchise entails, businesses that would be a good fit for you, the cost of investment and franchise fees, and more. Before you make your decision, however, be sure you also know the following about buying a franchise to increase your chances of success.

Learn From Other Franchisees

Although brands may have provided you with plentiful resources and information, the best way to learn the truth about being a franchisee is by talking to other people who have bought the franchises you are considering. Questions to ask them include:

  • What does the franchise fee cover?
    The cost of buying a franchise varies from business to business, so if your choice comes down to price, find out exactly what you will be paying for so you can determine its value. For example, what is the quality of the support system?
  • How is the relationship between you and the franchisor?
    Look for companies that provide ongoing assistance, training, and data and that fulfill their legal obligations to franchisees. The franchisor should be invested in your success.
  • Would you do it again?
    Any signs of regret can be red flags, but it is worth asking for a further explanation to understand the reason for a negative answer. A matter of a wrong fit, which you can avoid through these tips from Forbes, is not as important as a matter of an unhelpful or dishonest franchisor.

Asking for real-life experiences and advice from current franchise owners may help you avoid investing in the wrong franchise.

Know What Factors Affect Your Success

When you apply for a franchise, the business will consider factors such as your credit (including past bankruptcies), criminal background, and retail experience. Military service and previous management or ownership may also influence the acceptance of your application. Even your personality can play a role. Have a second choice in case of a rejection.

Remember that you are just as responsible for your success as the franchisor is. Attend all training programs, read all training materials, and utilize support services. You must be able to commit to the time and effort it takes to run the business in order to succeed.

Consider the Disadvantages

While it is true that the pros outnumber the cons, as Entrepreneur shows, it is still wise to consider the disadvantages of franchises. You have much less control than if you created your own start-up and you are at the mercy of the franchisor’s successes and failures. These do not have to deter you from becoming a franchisee, however. Proper planning with the help of a CPA and attorney can reduce the risks you may face.

The best way to get information on these factors is to talk to multiple current and past franchisees. There will be no perfect franchise that no one has had issues with, so look for feedback that is positive overall and consistent across the board.


Want to learn more about franchising with 7-Eleven?

Click one of the links below to view our franchising video, or to register for a webinar or seminar. Our webinars are free and available throughout the week, and we probably have an upcoming seminar in your area:

WATCH OUR VIDEO
REGISTER FOR A WEBINAR
UPCOMING SEMINARS

Back to Blog