Want to Become a Franchisee? Do This

Are you planning to purchase a franchise? The business model has enjoyed general success since its establishment almost a century ago. Today, franchised businesses come in all styles, sizes, and sectors. If you are serious about pursuing this path, it's imperative to take preparatory action.

Step one is getting your credit score as high as possible. Then, make an estimate, based on research, about the approximate cost of buying a franchise. If you don't have the cash on hand, take out a small business loan to acquire the needed funds. Explore all your options by studying the current market leaders in the franchising industry. After deciding what type of business you want to purchase, do a market analysis and competition study in your local area.

Work closely with a business broker to find out about opportunities, prices, and what types of operations make sense for your particular management style. Interview several current franchisees to get a feel for what it's like to run your own operation. Finally, hire an experienced lawyer who can guide you through the process and help you comb through the fine print of the final agreement. Never sign until all your concerns have been satisfactorily addressed. Here's how to begin.

Work On Your Credit Scores

There are many factors to consider when choosing a credit card and sometimes when you overlook them the result can be high interest rates, or other elements that might damage your score. Check your scores with all three major bureaus, Equifax, Experian, and TransUnion. Contact bureau reps directly if you find any errors. Pay all bills on time and work to get your credit usage percentage as low as possible. If you have total card limits of $20,000, aim to never carry a balance higher than $2,000 in total. It can take six months or more to see score improvement, so be patient and pay down those credit cards.

Take Out a Small Business Loan

The advantage of applying for a small business loan is that you can get one to match the size of your monetary needs and your preferred repayment schedule. When you work with a reputable lender, expect to get extras like a helpful support network, coaching programs, and reps who answer all your questions. Look for lenders who reinvest at least a portion of their profits into small enterprises as a way of supporting their client base for long-term success. Creating additional income streams begins with financial stability. For most indie investors and creators, getting a loan is the single smartest way to get the ball rolling.

Explore the Options

Study the most popular franchise opportunities in your area, focusing on the types of operations in which you'd feel at home. Consider your personal management style, experience, education, and personal preference. Visit at least 10 different franchised stores near where you live. Keep in mind that some of these enterprises might be your future competitors. Think long and hard about how you wish to proceed as a franchisee.

Interview Current Franchisees

Find at least five local franchisees you can speak with. Don't rely solely on the franchisor's rep to feed you a list of names. Find the stores on your own and include some that are far outside your prospective territory. Be honest with owners about why you wish to speak with them. Most will be forthcoming and helpful. This step is critical, so don't omit it.

Hire an Experienced Lawyer

Use your personal and professional networks to find a local lawyer who specializes in the franchise field. Take time finding someone you can work with who charges reasonable rates and has a long list of verifiable references. A capable pro is your best weapon in the quest to find the right opportunity and pay a fair price for acquiring it.

Verify Before Signing

There are several things you'll want to do before signing a formal agreement with a franchisor. First, visit the main office and get acquainted with the people who work there. Don't rely on the franchisor's sales agent as your main contact with the company. Likewise, spend time with the area supervisor who'll be overseeing your territory. It's important that you are able to deal with this person effectively. If you sign an agreement, you will often meet with the supervisor, especially during the first months of operation. Before signing:

·         Make sure your lawyer goes over every page of the agreement with you.

·         Make a list of questions or concerns you can then present to one of the franchisor's reps.

·         Don't go forward until all of your and your lawyer's questions have been fully addressed.