If you successfully purchase a franchise, then you become the franchisor and thus the primary distributor. If you then accept applications from others who wish to become a part of your brand by using the trademark, they become franchisees who pay you royalty. Clearly, this has the potential to be one of the most robust examples of commercial real estate in existence.
A Roadmap to Franchise Ownership
As is true for all things, research must form the bulwark of your investment strategy – whether you aim to become a franchisor or a franchisee. In the latter (since this is what most investors are aiming for), you want to only seriously consider franchises with a top-notch sales record, and which exist in a strong market. You will be responsible for a lot of fees, so the sales record and market growth must be able to sustain this.
Another consideration is the product/service: can you readily upsell? Think of a printer company that also sells paper and ink. The ability to add products will reap dividends. This also, of course, improves the chances of repeat business at a consistent rate – even in seasons of low sales.
Social responsibility is a big deal these days, and you would be wise (as well as profitable) to opt for a franchise that undertakes a cause or two. The consumer has shown that this matters to her, and so it should matter to you, too.
The Application Process
Now it’s time to follow through, and this begins with a complete assessment of your finances – as well as what’s needed to bridge the gap to franchise ownership. Gather the relevant documents denoting your education level, intended store location, and your background in business. Once you have these, you can begin scheduling “discovery day” get-togethers with an existing franchisor or franchisee (depending on which one you are).
All the above will determine whether or not you can access the funds needed to begin business operations. For help with this due diligence, contact us today.