Considering Buying A Franchise? Read This First

If you have an entrepreneurial spirit and being your own boss has long been your dream, you may be the perfect candidate to become a franchisee. Buying a franchise rather than starting from scratch has many advantages, including brand recognition and a built-in, established standard operating procedure.

There is a lot to consider when buying a franchise, though, and corporations that are actively looking to recruit new franchisees can be as persistent and tenacious as any top salesman. It's easy to get excited, particularly if you are considering a franchise that will also allow you to fulfill your passions, but it's important to do your research and take things slowly. You should also seek the legal advice of a franchise attorney before you sign anything. Here are two things to consider when determining if a franchise may be right for you.

Use Critical Thought

Hunting and fishing may be your passion, and if you find yourself with the opportunity to become a franchise owner in a sporting goods chain, you may feel like you have hit the jackpot. But there is far more to consider than simply purchasing a hunting store franchise. For example, a popular outdoor retailer is currently in the news. They have filed for bankruptcy, and are closing dozens of their stores. It seems they are unable to compete with larger, more popular outdoor retailers, but it may also be a matter of a changing business model. An outdoor recreation and sporting goods store requires a lot of overhead. The stores are typically large, which requires potentially pricey retail space and then the utilities and employees to run it. With online shopping becoming more and more popular, the franchise business type you are considering may or may not be the best choice. Do your research, and don't let your feelings overrule your logic.

Talk To Other Franchisees

If, after doing your initial investigation, you are still interested in pursuing the venture a little further, your next step is to talk to other franchisees. You will want to contact as many as possible, whether in person or via phone or email, and interview them. You want to know what their personal experience has been with the parent company, the level of support and training provided, and obviously, any major issues.

A complete list of franchisees is available in the franchisor's Franchise Disclosure Document (FDD.) This is a lengthy legal document that spells out every single term should you decide to become a franchisee. If you are satisfied with the results of your interviews with current franchisees, your next step is to have a franchise attorney go over the FDD and determine if there are any caveats to be aware of.