5 Things To Do Before You Buy A Franchise

Business People are Talking With their Coworkers About how to own the best franchises and what things we need to consider before buying a franchise

If starting a business from scratch sounds a little daunting, you might look into purchasing a franchise instead. Franchise businesses have a tried-and-true model that covers everything from branding, to pricing, to marketing.

When evaluating whether to purchase a franchise business, you’re likely to wonder “what’s the best franchise to own?” However, it’s essential to look at multiple factors to be sure that you’re making the right choice.

Evaluating The Best Franchises To Own

Let’s take a look at the five things you need to consider before buying a franchise business!

1. Make Sure You’re Ready

Owning a business of any kind can be an emotionally, physically, and financially draining experience. Before investing in a franchise, be sure you understand why you want to own one. 

If you believe that operating a franchise is more accessible than owning any other form of business, bear in mind that all businesses have obstacles. 

While managing a franchise business is more straightforward than starting something from scratch, having clear expectations will help you stay on track and manage any ups and downs that may come your way.

2. Study The Field

Do your homework before jumping in. Understanding the market and its demands is essential in starting a business. 

Is the industry expected to grow for the next 10-20 years? Who are the key players in this space and how can you differentiate from them? What is the cost of entry into this business and will my budget support that? Once you’ve studied the industry, competitors, and understand your budget, it’s easier to select the best franchise to own.

3. Franchiser Reputation

There are hundreds of franchise brands registered in the United States alone. Some of them have been in the business for many years. Others are still in the process of creating processes and expansion strategies. 

Neither of these is necessarily good or bad; it’s just another piece of information to consider when you investigate a franchisor with whom you’re about to sign a contract.

The franchisor’s reputation can significantly change the course of your business. Some factors to consider while studying a franchisor’s reputation are:

  • Tenure: Understanding how long the franchise has been in business is crucial. If it’s been a business for longer than 5 years, it’s a good sign. 
  • Reviews: You can check the online reviews of the franchisor from different websites and forums. You can also ask the franchisor for connections to existing franchisees to get their perspective.
  • Litigation History: Is there a history of the franchisor being sued by a franchisee or a vendor? What happened, when did it end, and so forth.
  • Financial Performance: Most states require franchisors to file an FDD, and many will offer one at some point throughout the sales process.
  • Media Coverage: You can also check what sort of media coverage the franchisor is getting. Good media coverage can often result in a great brand image making it one of the best franchises to own.
4. Know The Cost

One item that many new business owners fail to fully investigate is their start-up costs. Some of these fees are set and fully documented when acquiring a franchise. Others are more difficult to quantify and are not included in the original franchise payments.

It’s essential to clearly understand the exact cost you’ll incur to determine the best franchises to own.

Read all the documents carefully and have a precise number in mind. When in question, ask the franchisor and get any required details.

5. Read the Disclosure Agreement Carefully

When you reach this phase in the procurement process, you should spend some time looking over the FDD. The FDD lays out all necessary details concerning the franchise in great detail. 

It contains some of the most in-depth, unbiased information on the franchisor that you can find.

As part of their sales process, most franchisors will have an FDD review call with you. This might be with your sales representative, the franchisor’s general counsel, or (more than likely) both.

Get a High-Return Franchise in Your Budget

If you’re looking for the best franchises to own, iCode School may be the right choice for you.

iCode has been featured on CNBC, ABC, Entrepreneur, The Dallas Morning News, and many more, as well as having built partnerships with organizations like the NBA Thunder, Girl Scouts of North Texas, Texas Instruments, FC Dallas, and more.

STEM education is lacking in most schools today despite being a major interest for parents. iCode campuses offer STEM education for students grades K-12 through in-person, instructor-led classes that focus on fun, hands-on learning!

Get connected to an iCode representative, and join a Discovery Day presentation for a deeper dive into iCode operations. 

What are you waiting for? Connect with iCode today!

Recommended Blogs

In a world where financial stability is becoming increasingly paramount, side hustles are no longer a novel concept but rather a strategic component of many individuals' income streams. But what makes a good side hustle and how does it fit into a broader financial plan? One interesting thought, have you ever considered owning a franchise as a viable side hustle? This prospect may seem daunting at first, but with the right franchise and the flexibility to be as involved as you want, it could potentially become a lucrative addition to your income. Let's take a look at the potential of franchise ownership as a side hustle, focusing on the thriving sector of STEM education franchises, and examine some key insights to help you make an informed decision. Understanding the Concept of a Side Hustle A side hustle is any type of employment undertaken in addition to one's full-time job. It's essentially an entrepreneurial venture that allows you to earn extra income while retaining the security of your primary job. Side hustles have been growing in popularity, particularly due to the changing dynamics of work brought about by digital technologies. In the gig economy, where project-based or temporary jobs are common,…
The thought of becoming a business owner can be both thrilling and daunting! Many people want to start their own business but are confused about how to get started. This article will help you understand what it means to own a franchise, decide if becoming a franchisee is a good fit for your objectives and personality, lead you through the entire process, and reveal the best franchises to buy in 2023. What Is a Franchise? A franchise is a business wherein the owner of a brand and business model grants you the rights to use these assets (together with all associated trademarks, goods, systems, and so on). The franchise owner is the franchisor, and you are the franchisee. Getting started with a franchise is a much easier task than starting something from scratch which is one of the biggest reasons many people opt for franchising over starting something of their own. A Step-By-Step Process to Buy a Franchise Understanding what’s involved with starting a franchise can alleviate a lot of the stress and help you discover the best franchises to buy in 2023. Step 1: Know Your Why Owning any business can be an emotionally, physically, and financially exhausting experience.…
Franchise Buying 101 Want to start a business but not sure where to start? Have you considered buying franchise businesses, but you’re not exactly sure how it works? First things first: How do franchises work? A franchise is a proven business model where you leverage the power of an established system and brand to help you turn a profit without having to figure everything out on your own. In this article, we’ll take you through the process of buying a franchise company, explore the costs involved, and answer questions you might have before jumping in. When to Buy a Franchise Before you make a decision, it helps to consider when you should buy into a franchise opportunity. When is the best time for you? To make that decision, you’ll want to consider your circumstances, financial situation, and business goals. To start, ask yourself the following: Do I have enough money saved for startup costs and ongoing expenses? Do I have access to financing? Do the market conditions in my local area make sense for this right now? Is this business model feasible within my current lifestyle and goals? Will my past experiences support my success in this venture? Does the…

Request Franchise Information

"*" indicates required fields

Do You Meet the Following Financial Requirements?
$100K Minimum Cash Liquidity?*
$500K Minimum Net Worth?*

Please review the estimated required initial investment here in preparation for your call. 

Hidden
Hidden
Hidden