4 Ways to Keep Sane and Enjoy the Franchise Ride
Buying a franchise can sometimes feel like riding a roller coaster.
The highs can be exhilarating. The adrenaline rush that comes with the prospect of leaving a past career behind and starting a new one. The freedom that comes with business ownership. The opportunity to spend more time with your family. And of course, the possibility to make a financially rewarding investment for your future. Possibilities abound.
But heading towards a franchise opportunity can sometimes be overwhelming. Before you know it, you've moved past the evaluation stage and the pressure is on to decide on a number of units, select the best territory, get funding and get that thick Franchise Disclosure Document (FDD) reviewed by a franchise attorney. Your stomach is knotting up and out-of-pocket costs are climbing. It seems like there's so much to consider and orchestrate at the same time.
Here's how to keep sane and enjoy the ride.
1. Work with a great franchise consultant. A great consultant will spend time getting to know you and your needs. They will present franchise opportunities that fit your budget, your goals for your family's future and your interests. Want to leave that old career behind and get into a business that's completely different? Or do you want to leverage your past professional background? A franchise consultant can guide you towards the best investment opportunities. Contact us for our approved franchise consultants.
2. Talk to franchisees. The most under-utilized resource I've come across as a franchise attorney is the list of franchisees in Item 20 of the FDD, "Outlets and Franchisee Information." This is an incredible wealth of information for prospective franchisees who want inside information on break-even points, the relationship and level of support from the franchisor and return on investment (ROI). Don't be afraid to call them up and get some valuable intelligence about what it's really like to be in the franchise system.
3. Make a pro forma. You don't need to be an excel wizard to conduct a solid financial evaluation of your franchise options. Sit down and list all the costs associated with a new, ground-up franchise opportunity versus purchasing an existing one. Don't overlook the costs of retirement fund rollovers, fees payable to the franchisor for a transfer and yes, legal fees. You can also review Item 19 "Financial Performance Representations" so that you can estimate your break-even point - when your anticipated revenue allows you to recover those expenses.
4. Create your Own Franchise VIP Network. One of the best ways to have a positive franchise buying experience is to have a great team. Once you find a provider you enjoy working with (perhaps it was your franchise consultant or your franchise attorney) ask them for additional referrals. You'll need an accountant that understands franchising. You may need a provider for that 401k rollover or SBA loan. You'll need a commercial insurance agent to meet the insurance requirements contained in your franchise agreement. Once you find someone you trust, take advantage of their trusted network.
For more information on buying a franchise and your FDD and Franchise Agreement, contact us at (602) 292-4168 or message us at firstname.lastname@example.org.