So you’ve decided you want to run your own business, and you want to choose a franchise that’s the right fit for your skill set, finances, and lifestyle. With more than 3,000 franchise systems available in the U.S. and Canada, where do you start?
The annual Franchise 500 list compiled by Entrepreneur magazine is a great start. This expert resource provides a concise profile of each franchise, with valuable information presented on the number of franchise units, start-up costs, franchisor support and ranking history. Express Employment Professionals is honored to be featured at #31 overall for 2016, and #1 in the staffing industry for the past five years!
How do you make a wise selection from this or any other list? Here are five important considerations you can’t ignore:
- What’s in a name?
“When they first start out, people tend to immediately gravitate to the famous brands they know as consumers,” said Davis Lewis, vice president of franchising for Express Employment Professionals. “Then they are disappointed to learn that the fees for such high profile businesses may be out of reach, or discover that the limited territories still available are not anywhere they want to live.”
Instead, it’s important to focus on what’s important to you and then explore the highly rated opportunities that are available.
“For example, if you want to live in a certain location, focus on opportunities available for that region,” David notes. “Most people find the best opportunities are businesses they have not heard of before, because there is no franchise in their town. That’s often a golden opportunity.”
- What Are Your Key Motivators?
Consider exactly why you want to own a franchise.
“I recommend listing your top three motivators, then narrowing down the list of franchises that align well with the reasons you want to own a franchise,” David suggests. “If having weekends off to spend time with family is important, there are some franchises that would not be ideal for you. Do you want to work an eight to five day, or do you prefer different hours that appeal to your lifestyle? Finding the right lifestyle fit is important for personal and business success.”
- How Much Capital Do You Have to Invest?
“This may sound easy, but there are some questions you must ask to make sure you don’t get in over your head,” David said. “If it costs $50,000 for a franchise, and you have $65,000, that may sound perfect. But, ask the franchisor how much you will actually need to invest before you become profitable. If it takes another $150,000, do you have access to that funding? Would taking out a loan for that amount be comfortable within your personal level of risk tolerance? You want to consider all financial costs before you make a decision.”
- What’s the Size of Your Territory?
“This is a question you cannot ignore, because it can vary greatly between franchises,” David says. “Is your franchise limited to a square mile? A single town? Does it cover a region or half of a state? It’s essential to know up front how you can grow your business over time.”
- Can You Be Happy in the Franchisor’s Culture?
“Some people mistakenly believe that this is only important if you are looking at working at a daily job for a company, but it’s even more important if you choose to own a franchise,” David notes. “This is a larger commitment. Choosing a franchise is like choosing a business partner. You want a business partner you’ll be happy to work with for the next 10 years, or longer. If the culture does not feel in alignment, it’s not the franchise for you.”
For more information on Express Employment Professionals and the fast-growing staffing industry, visit ExpressFranchising.com.