Dear Matt: I want to start my own business. I'm thinking of franchising but I don't want to spend the rest of my career asking, 'Do you want fries with that?' Any ideas?
Matt says: FranNet (on the web at frannet.com, blog.frannet.com and frandata.com) is a privately-held franchised business consulting company that has helped thousands of people find the right business fit. "Buying a business is a life-changing decision and you'll want to know as much as you can about a franchise before you buy into it," said Mike Welch, owner of FranNet Minnesota.
FranNet works with potential franchisees through all aspects of the process and offers these tips:
1. Franchising is more than fries. A lot of people who think of franchises automatically think of restaurants or hotels. That was a fairly accurate portrait of the industry 25 years ago, but there are many new opportunities today. "We've found that professionals often find the most success and satisfaction working in a completely new field," said Welch.
2. Have working capital. Make sure you have a buffer. New businesses take a little time to start generating profits, and you'll want to have cash on hand to cover expenses and pay for extra marketing. It's great to avoid debt, but it can be worth taking out an SBA loan in order to preserve working capital.
3. Talk to at least two of the top 10 franchisees in the system and find out what makes them successful.
4. Evaluate systems. When you buy a franchise, you are buying business systems. Efficient systems often give a franchise an advantage over a mom-and-pop operation. Look into how well documented the systems are and how tested and proven they are, including the point of sale system. The better the system, the better the franchise.
5. Don't be afraid to ask questions. Franchisors owe you solid answers before you invest in their concept.
