There is nothing wrong with small independent businesses. However, if you want to scale up your current business or begin a new adventure, then a franchise may be a viable option. Successful franchises are all around us in almost every place we visit, so there must be some benefits to joining these organizations.
Nonetheless, entering a franchise agreement is a huge commitment. You need to make sure that it meets your specific business needs. Outlined below are some key factors to consider.
Can you follow the rules?
As an entrepreneur, you’ve been used to doing things your own way. Franchises typically implement uniform policies, procedures and protocols that they expect franchisees to follow at all times. Depending on the agreement, you might have some flexibility, but there will be general guidelines that must be adhered to. Are you ready for someone else to have this much say in your company? Could there be conflict further down the line?
Is it financially viable?
Franchisors can help franchisees get off the ground with startup costs, equipment, etc, but there are risks associated with entering these agreements. You cannot be guaranteed profits and it often takes a year or two before the business takes off. Is this something you can afford? Are you looking for a short-term cash boost or are you in this for the long run?
Before committing to a franchise agreement, it is in your best interests to become familiar with the legal details of the proposal. Seeking guidance about this will help ensure you don’t run into any trouble further down the line.