Self-Employed Franchise Opportunities: 11 Questions to Ask Before Buying
The opportunity to be your own boss is a dream for many Americans. But what does it take to make that dream a reality? It turns out that taking control of your career may be more attainable than you realize.
Self-employed franchise opportunities offer a chance for entrepreneurs to be their own boss and own their own business. However, it’s not as easy as just buying a franchise. It’s important that you buy the right franchise in which you can be both successful and happy. The best way to determine the right self-employed franchise opportunity for you is by asking the right questions.
Here are 11 of the most essential questions you need to ask your franchisor to avoid any surprises and find the right opportunity for your success.
1. What are the startup costs?
One of the first things you should know before buying something is how much it’s going to cost. When it comes to buying a business, there is a lot more to consider than just the sticker price. What are the total startup costs of your self-employment franchise opportunity, and what do they cover?
Always make sure you have a clear understanding of all the costs and don’t be caught off guard by any unexpected costs or fees.
2. Is financing available?
Once you know how much your startup costs will be, your next question is likely how you’ll afford it. This is when it’s a good idea to speak with your franchisor about available financing options.
Not all franchisors offer direct franchising to franchisees. However, your franchisor may be able to give you a reference to a qualified lender. A reference from an established and trusted business can go a long way to helping you get your foot in the door to find the financing you need.
3. How much money should I plan for living expenses?
You may have planned for your startup costs, but did you consider how you’re going to survive while your business gets itself off the ground? It may be a few months before you can begin drawing a steady income from your franchise.
It’s important to have a clear estimate of how much cash you should have in reserve to cover your living expenses until revenue can start rolling in. This is as much a conversation between your family, your personal budget, and your franchisor. Ask what the experience has been like for other franchisees and get a ballpark estimate of what you should save.
4. What is the advantage of B2B franchising?
If you’re reviewing self-employed franchise opportunities, then you have likely looked at B2B franchising vs. B2C franchising. B2B (business-to-business) franchising has you providing services to other companies, whereas you work directly with customers in a B2C (business-to-consumer) franchise.
Ask your franchisor about their business model and why it makes sense for you. Also, make sure you ask yourself about the audience with whom you prefer to do business.
5. How are franchise territories decided?
A big part of starting a franchise is establishing the territory where you do business. These territories are often decided by your franchisor, based on market size, demand, competition, and other franchisees. The purpose is to try and put each franchisee in the best situation for them to succeed.
Be sure to ask your franchisor about how territories are established and if the territory will be exclusive to your business. Understanding where your business will be can go a long way to determining how well it will do.
6. Do you offer training to franchisees?
A key feature of purchasing a franchise is that you are buying into a proven system. Of course, even the best systems can’t help if you don’t know how to use them.
It’s in a franchisor’s best interest for their franchisees to do well. Any franchisor worth their salt will offer a comprehensive training program to help you build the foundation you need to get your business off the ground. Speak with your franchisor about training and how it plans to bring you up to speed.
7. What ongoing franchise support can I expect?
Beyond your initial training, you want to make sure your franchisor will continue to support you after you’ve gotten things off the ground. Ongoing support should include help with marketing and lead generation to drive your customer base.
Some franchisors even have dedicated IT and call center support to help answer any technical questions you or your customers might have. Make sure your franchisor is prepared to give you the support you need to succeed as your own boss.
8. What kind of equipment will I need for my business?
Depending on the kind of franchise you’re buying, there may be specific equipment required to get your business running. Some franchises may require a physical office space while others can be run from the comfort of your home.
You may need a particular type of computer system or software to run your operations. Your franchisor should be able to give you a breakdown of the equipment you will need to be successful and how much it will cost.
9. What makes this opportunity different?
There are a lot of opportunities out there for entrepreneurs. Ask yourself, and the franchisor, what makes this opportunity different to set it apart from other self-employment franchise opportunities.
Does the franchisor have a unique system that makes its operations more efficient? Maybe the company has proprietary technology that sets it apart from its competitors. Learn what sets your opportunity apart from the others and how your business will stand out.
10. Can I speak with other franchisees?
When considering a self-employment franchise opportunity, or any franchise opportunity for that matter, the feedback and input of other franchisees is invaluable. As a franchise system, other franchisees can share their experiences and give you a better idea of what you can expect with your investment.
If a franchisor is hesitant to let you speak with other franchisees, then you consider that a serious red flag regarding your self-employment franchise opportunity.
11. How much can I expect to make?
Last, but certainly not least, is maybe the most important question of all. Like any big investment, you’re probably wondering how much you can actually expect to make. Luckily, your franchisor should provide you with a document that helps answer this question.
Information regarding earning potential is often covered in Item 19 of a franchisor’s Franchise Disclosure Agreement (FDD). While your franchisor can’t make any promises about what you will make, they should be able to provide you with a reasonable estimate based on the performance of other franchisees.
Always be sure to review the FDD carefully, and don’t be afraid to ask your franchisor any additional questions you may have.
Contact Nexterus About Your Self-Employment Franchise Opportunity
Now that you know the right questions to ask, it’s time to start the conversation about your self-employment franchise opportunities! Connect with Nexterus to see how you can get started with your supply chain services franchise. Our friendly team is happy to answer any question you may have to make your path to business ownership as smooth as possible.