Thinking about investing in a franchise? Discover the top six dos and don’ts of franchising, so you know what to look for in a franchise — and what to avoid.
When you invest in a franchise, first and foremost, you’re buying a brand. Franchises have spent a lot of time, money and energy building a reputation, which is something investors will benefit from the minute they open their doors. Because of this, it’s important to find a brand whose values and goals align with your own so that you’re proud to represent the franchise.
Unlike independent businesses, franchises have higher success rates because they’re backed by a proven model. While initial franchise fees and ongoing payments may seem intimidating, owners benefit from the transparency and consistency provided by the franchise system over the long haul.
Franchisees are responsible for running day-to-day operations, just like independent owners, but they have the advantage of receiving ongoing support with everything from marketing to training, community outreach and more.
DO: RESEARCH YOUR OPTIONS
Many investors, unsure of what exactly to look for in a franchise opportunity, will become dazzled by certain aspects of a brand before doing their due diligence and fully understanding what they might be taking on. Even if you find a brand that appears to tick a lot of your boxes, it’s important to meaningfully consider your options and what partnering with each will look like both in the short term and the long run. Conducting a competitive analysis will shed light on the strengths and shortcomings of each company and emphasize what may be most important to you as a prospective investor in a franchise.
DO: NETWORK WITH CURRENT AND FORMER FRANCHISEES
Brand owners and operators can often provide even more insights than the franchisors themselves. From perceived brand value to quality of operational standards and support, these independent business owners have faced all of the challenges and experienced the successes that may be awaiting you. And while it’s difficult to pinpoint profit standards within a franchise, current franchisees can give you a sense of what to expect in terms of your return on investment and future profitability.
DO: LOOK FOR GROWTH POTENTIAL
Is there growth potential in the industry you’re considering? How are specific franchisors leading the charge? Many brands will provide their own market research, but be sure to do your own investigating. In addition to overall industry viability, make sure your potential investment is one that will provide a vital and necessary resource within your own community. Beyond that, investigate the ongoing growth of the franchise — how many locations the brand has opened, how quickly, and how this affects customer retention and brand awareness.
DON’T: RUSH THE PROCESS
The process of building a business is no small thing, and all of the initial legwork you perform to find the right fit should not be taken lightly. As a prospective franchisee, you should invest the necessary time to perform due diligence, working with experienced advisors (including lawyers and accountants) to make sure that any franchising relationship you enter into is mutually beneficial and the best opportunity on the table.
DON’T: FUDGE YOUR FINANCES
The upfront and ongoing costs of owning a franchise can prove prohibitive for some prospective investors, so it’s essential that you’re honest with yourself and your franchisor about where you stand. In addition to startup costs, it’s recommended that you have a comfortable level of capital on hand to support the early days of getting your business off the ground and have a safety net in case of an unforeseen challenge. Many franchisors will offer in-house financial support, discounted fees, or assistance with third-party lenders, but neither you nor your chosen brand will have a full sense of what you need if you’re not upfront about your situation.
With American Family Care, the cost of opening an urgent medical care franchise is incentivized not only by the training, support and proven business model, but the strong partnerships with vendors and service providers that allow franchisees access to cutting-edge tools and technologies often at discounted rates.
DON’T: SELL YOURSELF SHORT
Just because you might not have experience in a given industry doesn’t mean you should count yourself out. The best franchisors seek out owners who are passionate, determined and ready to learn. Whether you’re new to the medical field or the world of franchising or have decades of experience, AFC provides comprehensive training and support to help you make your business as successful as possible.
A leader in one of the most essential and recession-resistant industries in the world, AFC is invested in ensuring that our franchisees operate with confidence and access to the best practices in urgent care. To learn more about franchising opportunities with AFC in your area, apply now!