Researching Franchise Ownership

There are so many different industries that have franchise opportunities. In fact, there is likely no industry that does not already have a franchise model. Once you are aware of this, your job is to narrow down your choices to fit your passions, your skills, and your community’s needs.  In addition, you’ll need to reconcile all that with your budget and financial ability. Rockwell Birch has a free Discovery Process eBook in which they outline what they call “Finding Your True North”.   

Tip #1: Determine Your Industry or Area of Interest

When you are looking at an industry to find your franchise opportunity, you want to ensure that it’s something you know you’ll want to be involved in.  While you don’t have to have all the skills or business knowledge to run the franchise, it certainly does help to have some form of experience and the ability to follow the franchisor’s process and systems. After all, you’re going to be investing your money and time with this business so following their proven system will help to ensure success and a future asset that is greater than your initial business investment.

Industries or areas that offer franchise opportunities for investment include:

• Advertising & Marketing
• Automotive Franchises
• Building & Storage
• Business Opportunities
• Business Services
• Business to Business
• Canada Franchises
• Child Related
• Cleaning & Maid Services
• Coffee Franchises
• Computer & Internet
• Dry Cleaning & Laundry
• Education
• Employment & Personnel
• Financial Services
• Fitness
• Food & Restaurants
• Frozen Yogurt / Ice Cream
• Green & Eco Friendly
• Hair Care & Beauty Salons
• Health, Beauty & Nutrition
• Home Based Business
• Home Services
• International Franchises
• Maintenance
• Management & Training
• Master Franchises
• Miscellaneous & Unique
• Packaging & Mailing
• Pest Control
• Pet Related
• Printing & Copying
• Real Estate
• Repair & Restoration
• Retail
• Senior Care
• Sports
• Tanning Salons
• Travel
• Vending

The list above is representative of the types of industries that offer franchise opportunities. You can find a range of investment levels in each industry, so don’t think that any one industry is out of bounds for you, work with Rockwell Birch and they will find what may work within your budget. Rockwell Birch has a questionnaire that you can fill out which will help you fine-tune your search.

Tip #2: Determine Your Budget

This list of potential costs may or may not be complete, each state and business is different so you should compile the costs you find out about as you go about your due diligence. You should add to this list as you do your research so that you can ensure that your budget is sufficient to meet the needs. You’ll need to also consider liquidity while starting up as you move to profitability.  A good organization is www.score.org to get more information about starting a business, which can be both challenging and a rewarding experience.

Typical costs of running a franchise, not including the franchise fee, include:

* Accountant fees

* Advertising and marketing fees

* Build-out fees

* Business licenses

* Equipment

* Grand opening expenses

* Initial advertising and marketing expenses

* Insurance

* Landscaping

* Maintenance

* Product costs

* Rent

* Royalties

* Salaries

* Signage

* Supplies

* Taxes

* Uniforms

* Utilities

* And more

Tip #3: Do Your Due Diligence

You’ll need to research every possibility.  It helps once you’ve narrowed down your investment budget, industry, and specific opportunities. You’re sure to find just the right franchise for your personality, your goals, and the lifestyle with the help of Rockwell Birch’s Discovery Process and your personal research and validation. Rockwell Birch can also help you along the way by providing third party professional referrals to CPA’s, Funding and Legal companies for advice and counsel.

* Validation Questions – Talk to other owners, and not only the ones they want you to. Ask for a list of all franchisees and work with the franchisor on whom to talk to.   You’ll want to ensure that they will be in various stages of business length and growth for a good-rounded outlook.  Rockwell Birch has a list of questions and together you can come up with a good list that fits your choice.

* Questions to ask the franchisor – The old who, what, why and how; get their story and see if this resonates with you and your vision.  Read the Franchise Disclosure Document – Rockwell Birch will walk you through an overview of the 23 items that are in all FDD’s.  Find out what their strengths are and goals over the next few years, is your territory protected or can you go anywhere?  Rockwell Birch will offer you a longer list and even go over them and others you bring up, so you are prepared to thoroughly research the business opportunity and franchisor.

 * Talk to professionals – you need to talk to CPA, Lawyer, Tax specialist, possibly a real estate specialist and funding companies, so that you can find out about the aspects of a starting new business and all the parts that may be involved in your particular business choice.  This way you are making an informed decision and increasing your success and potential.

By Rich Groark CFC with Rockwell Birch LLC