Key Questions to Ask Yourself When Choosing a Franchising Opportunity

For those who are interested in running their own business, there are several paths to consider. Starting an entirely new business from scratch is often the first thing that comes to mind, but in many cases, it can also be the most difficult. If you don’t have a specific business idea in mind that would push you toward starting something unique, an excellent alternative is opening a franchise.

Franchises are proven business models that take away a significant amount of the risk. You can be confident that the idea is good because it has been done many times in the past. In addition, most of the companies that offer franchising opportunities will also provide help with things like choosing a location, setting policies, finding vendors, and much more. With thousands of different franchise options out there, however, it is important to make sure you choose the right one for you. The following are a few things you can do to help ensure you make the right choice.

What Do You Like to Do?

Investing in a franchise is a huge commitment, and not just of your money. Once you decide to purchase a franchise, you really need to be able to pour your heart into it to ensure it will be a success. With this in mind, really think about the type of work you enjoy doing. Making a list of things you love doing, things you are willing to do, and things that you would hate. From there, you can start to narrow down the list of franchise options based on which ones align with your preferences.

What Is the Time Commitment?

As a business owner, you will be putting a lot of your time into the franchise. Different types of franchises, however, have different time requirements. If you open a restaurant, you can likely expect to work a lot of nights and weekends, especially at first. If you open a coffee shop, mornings may be busier. Some franchises are more of a 9-5 commitment, and others will need you to be available almost 24/7. Don’t romanticize this part of the process. Think about what you will be willing to do for potentially years into the future.

What Is the Market Like?

While a franchise company will likely help you to look at different markets to find one that will work, you too will have a lot of insights into the markets in your area. Focusing on franchises that you believe will thrive in the areas around you is a great way to find something that can be a success.

How Much Financial Investment Is Required?

Of course, franchises require that you invest money to cover the costs of a building, inventory, and much more.  You will also be required to pay the Franchisor an ongoing fee for use of the company branding. Depending on the franchise, this could be anywhere from a few thousand dollars to a few hundred thousand dollars, or even more. How much money you have available (both in cash and potential loans)? Look realistically at franchise options that you can afford.

How Will You Hold Your Investment?

Once you have decided to take the leap into franchise ownership, decide how you will “hold” your investment. It is common for franchisees to form limited liability companies or corporations to own the franchise rather than sole proprietorships. The reasons are the same with any type of business ownership-limited liability protection and taxation. The Franchisor will have very limited, if any, liability for the activities of your franchise, so it is important that you take steps to protect your investment and your personal assets.  

Contact Us

If you have any questions about franchises, or you are ready to sign contracts and need them written or reviewed by an attorney, please contact APH Law. We have years of experience working with people interested in franchise opportunities, and can help you throughout the process.

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Written by APH Law PLLC

APH Law PLLC

When we founded APH Law PLLC in 2010, we did so out of a desire to connect business owners with more and better opportunities. No matter what industry you’re operating in, creating a strong foundation, preparing for the future, and protecting against challenges are key to long-term success. It is this kind of support that we take tremendous pride in helping businesses.