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

It’s on your mind - an education business. You’ve thought about starting one. You’re confident you can teach kids valuable skills and grow a successful business around it but is now really the right time?Yes! Now is the right time to launch your business. Opportunities are booming in the STEM education space. It has never been more accessible or affordable to start an education business, so don’t let your dream slip through your fingertips.It’s daunting to leap into your own business. Thankfully, entrepreneurship doesn’t have to be scary (or even risky). Today, we’ll explore opportunities in the education sector, and then we’ll show you how to launch a science, technology, engineering, and math (STEM) startup with a roadmap for success. The Future of Education Businesses​ If you pay attention to world events, you know there’s been an uproar in education. Parents feel their kids aren’t being taught valuable skills and knowledge that prepare them for the real world. As a result, they began to search for solutions outside conventional education.Unfortunately, the number of non-traditional learning institutions is limited, especially in certain areas like STEM.The education crisis is tragic for parents but great for entrepreneurs. It means a vast problem exists, and when you solve…
The world is rapidly changing, and the educational system is falling behind. Schools are scrambling to modify their curriculum to include modern STEM education. However, this systematic change is bringing a few issues to light.Firstly, teachers aren't well equipped with the materials and methodologies to teach STEM in the most impactful manner. Also, schools aren’t able to provide the amenities necessary for every student. Further, the teaching staff requires frequent training and will need equipment upgrades to stay current with evolving technology. How Does A Children's Education Franchise Make A Difference? Although some schools are working hard to create their own STEM curricula, it will take a long time for them to catch up due to the pace at which technology is changing. This is where a children's education franchise comes into play.  A children's education franchise has immense experience in the domain and already has trained instructors and modern equipment. Let's look at three reasons why many schools are electing to partner with a children’s education franchise rather than develop programs of their own. 1. Community Demand Parents today are looking for more technical education and practical experience for their children. With the power of the internet, they already…
Building a business is hard, it takes a lot of effort and skill.If you’re a franchise owner or thinking of starting a franchise business, you’re in the right place. In this article, we’ll be looking at 10 success tips for business owners. 10 Success Tips for Business Owners 1. Start The Right Business Choosing a business according to your skill set is crucial, but what if you're unclear about your skill set? Think about what you enjoy doing. For example, if you enjoy working with children, look for a franchise that allows you to do so. If you have a passion for technology, consider a computer-related franchise concept. However, you’ll also need to consider the real, everyday duties. You may enjoy cooking, but operating a restaurant will require you to do much more than that. Managing, employing, training, and terminating employees will be among your key responsibilities. 2. Improve Your Business Skills While most franchisors will teach you their system and support you, you’ll also need some fundamental business skills. For instance, you'll want to have an understanding of accounting basics, marketing concepts, and how to hire and fire personnel.Consider attending courses to improve your skills if you’re a little…

Request Franchise Information

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