Tips For Researching The Best Franchise Business

When considering the best franchise opportunity for you, there's a few things to look at when doing your research. If you research these things right, you give yourself the best possible chance of success. Research the wrong things and you might be doomed before you even get started.


1. Start-up Costs - Some franchises cost as little as P100,000 all the way up to a couple of hundred thousand pesos. On top of that, depending on which franchise it is, there may be start-up costs in getting an office or retail location, leasing or purchasing equipment, inventory, holding costs, fixed costs, variable costs, etc. I think I've used the word 'costs' a bunch in this section.

You have to really understand ALL the costs when finding the best franchise opportunity for you. Sometimes a home-based franchise might be appealing because you don't have the costs of what's mentioned above. Sometimes all you need is a computer, telephone and Internet connection and you can run your entire franchise. Like everything, do your research first.

2. Scalability - This point is so important but it's overlooked so many times. What I really mean here is that you have to know what kind of return you can expect on your investment. Is the return going to make you the money to achieve your financial goals? The reality is that most franchises will not get you to the promised land by themselves. It usually requires owning multiple franchise to achieve the income and lifestyle that you truly desire, but not always. Once again, your research can open up some hidden nuggets of gold.

3. Royalties - Companies like to get paid just like you right? Yeah, I thought so. Royalties can range anywhere from 2%-8% depending on the business but what's pretty universal is that the royalties are based on gross revenue and not net profits. Ouch. That can hurt depending on the franchise.

In fact, some franchises have a minimum royalty fee no matter the circumstances. For instance, some car wash franchises have a minimum in place even during the rainy season where business essentially 'all washed out'. That can put some people in a bad situation or even out of business. Do your research carefully and make sure the best franchise opportunity for you fits into your parameters.


4. Passion - Now your passion isn't something you can research in finding the best franchise opportunity, but it's vital to the process. We all dream of owning our own business and but the truth is its very hard work and long hours. If you're not passionate about what you do, then you won't put in the necessary time and effort to succeed.

You also need to understand what you want out of life and have balance. If your goal is to be home every night and on weekends, don't get a franchise where the busy times are at night and on weekends. Be smart about your decision and keep your priorities and goals in mind that is in alignment with your values.

Bottom line is there's a lot of factors when considering owning a franchise. Take everything above into consideration, do the proper research and choose the best franchise opportunity that is right for you and your family.