A few franchising basics

Are you ready to be your own boss? If you are considering a franchise, here are a few franchising basics to get you started:

• The IFA defines a franchise as, “the agreement or license between two legally independent parties which gives a person or group of people (franchisee) the right to market a product or service using the trademark or trade name of another business (franchisor).” To give an example, if you (the franchisee) were to enter into an agreement with an already successful fast food restaurant (the franchisor), you would be able to sell their already successful products and use their already well-known name instead of having to start out with a product that hasn’t been tested and a name that has never been heard.

• Before you start your franchise search, it is important to evaluate yourself and your assets. Many franchises require a substantial initial investment ranging anywhere from a few thousand to hundreds of thousands of dollars. It’s also important to find someone who can help you navigate the franchise world. Franchise consultants are non-biased, third-party experts who can help you get into the franchise that is right for you.

• Do you know what the terms franchise fee, royalty fee, in-house financing, or Franchise disclosure statement mean? If you don’t, learning basic franchise-related terms is a must.

• Make sure you spend as much time as you need finding the right franchise for you. When looking for the right franchise, there are many things to take into account, starting with finding something that you can be passionate about. After you find out what type of franchise you want to own/run, it is important to do your research, investigating every company you are considering in depth. There aren’t just a few specific things you should know; you should know everything from product prices to how the company does during the winter to how much your initial investment will have to be. We can help!