Conduct meetings with franchisors if need be. We have already discussed the necessary questions that you should ask in a one-on-one with prospective franchisors. This is the part where you do your research. After the soul searching, you now have to evaluate the facts and then arrive to a conclusion. After all, you have to make sure you get the most from your money and your franchise isn’t a poor business experience. Today we are going to talk about 6 things to consider when buying a franchise. Let’s get started!

1. The Demand for the Franchise

Don’t just buy into the hype. Assess the neighborhood and see if there is a demand for your franchise. If yes, it will be a hit and the rate of returns will be faster. There are benefits if you are the first in an area i.e. the market is yours and there are also benefits if others have gone before you as you can leverage from their marketing activities.

2. Competition in the Market

Keep tabs on the competition. If you are choosing to open a Pizza Hut franchise in an area with a variety of pizza eateries, then your business might suffer.

3. Support Offered by the Franchisor

Check if the franchisor offers support and training as a part and parcel of the agreement. If you are new in business and are left on your own to figure things out, things might not end well for you.

4. Franchisor’s Financial Status

Research how long the franchise has been in business check how many regions they operate in and the number of franchises they have.  Is your franchisor financially sound? In case of a public company, its annual filings should be listed in EDGAR. If it is a private company, you should be given a “disclosure document”. Seek legal help if you are unsure.

5. Franchisor’s Plan for Growth

Is the brand here to stay for long? Will it go out of business if it has a limited chain of outlets? What is your franchisor’s plan for targeted growth and expansion?

6. Examine Earnings’ Potential

While you can check with other franchisees and discuss their experiences with the franchisor. Would they buy again? Ask for a comprehensive list of financials, see who failed and why and if the reasons can be superimposed on your circumstances.

The journey to owning a franchise might be tedious, from deciding to buy a franchise to entering your new shiny building, but it is well worth the trouble if you exercise caution at every step. It gets relatively easier if you know what you want and are not sidetracked by other offers on the way. If you pause and consider not just both sides of the coin, but all the embossing on it, the chances of making an intelligent choice will increase and so will the probability of your success.