Investing in a franchise rather than starting a business from scratch has many advantages. Your risk is minimized because you have a proven business model. Also, franchisers provide training and support to help you get started and maintain operations. The main disadvantage is that you must pay fees and royalties to the franchiser. There are many low-cost franchise opportunities available that may interest you.
Determine what type of franchise business you are interested in owning-automotive, business services, cleaning, computer, food, health, home-based, recreation, retail or travel.
Decide how much capital you are willing to spend. Between cash, investors and small business loans, how much money do you have available for start-up? Many low-cost franchise opportunities can get started for under $20,000.
Utilize online franchise directories. There are dozens of franchise directories that provide detailed information on Franchise opportunities. Things you should consider when narrowing down your choices include company background, brand recognition, start-up costs, fees, training and support.
Contact the company headquarters of the franchises you are considering. Ask for a franchisee information packet and application to be mailed to you. Review the materials from various companies and determine which franchise you will buy.
Talk to franchise owners of the company you are considering. The best feedback will come from people that are already doing business with the franchiser.
Read the Uniform Franchise Offering Circular (UFOC). The UFOC is a disclosure document in which the franchiser must disclose certain information about finances and problems with franchises. The Federal Trade Commission requires all franchisers to supply prospective franchisees with a UFOC.
Fill out the franchisee application. Make sure the franchise agreement includes the terms for terminating, extending or selling the franchise. Also make sure you completely understand the fees and costs involved.
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