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How do you choose the right franchise from the start?

Once you have decided a franchise is the right route for you, how do you choose the right one? To choose the franchise that is right for you and that will fulfill your business dreams, you must know yourself, your skills, and your dreams and aspirations. You must begin the process by analyzing yourself. You can start by investigating into various industries that interest you. Once you have narrowed down the choices to a few industries, study your geographical area and determine if there is a market for that type of business. If so, follow a research plan and begin contacting the franchise companies that you believe have potential in your area. Any reputable franchisor will send you extensive information about their business at no cost.

After you receive this information, which is usually disclosed in the offering circular (also known as the Uniform Franchise Circular Offering or UFOC), you have to read it carefully. Read between the lines and do your research. You can go to the library, look online as well as in professional journals, trade magazines, reference books, government publications, and annual public corporation reports. Check with the Federal Trade Commission (FTC), the state franchise authority, and the local Better Business Bureau to see if there are any problems with the company. You can also contact local chambers of commerce or business development organizations and see if they can supply information pertinent to you research. Try to determine if this company is doing well in terms of its financial health, management, reputation, and growth prospects.

After you have read the offering circular, ask the franchisor for a list of franchisees that you can contact. Current franchisees are a great resource and can give you detailed insight on how the company is really doing, what to consider before and after you get into the business, and other critical information. You should visit franchise stores and corporate headquarters to uncover any information that will help you make your decision. Assemble a team of professional advisors, including a franchise attorney and an accountant. They can help you answer technical questions and will be a useful resource throughout the research process.

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