Franchise Fever Part II: Catch It!
Franchise businesses seem to be taking over the world. Certainly I’ve wondered how to get in on some of that cha-ching. If you’ve done the same, read on! Though, if you’d like the benefit of a locally flavored backstory and some how-to basics, you might want to go back and read the first in this two-post series.
To conduct an honest assessment of whether you’re franchisee material, franchise consulting firm MSA Worldwide’s article on the subject contains some simple questions you can ask yourself, such as, “Will you be able to follow the directions of the franchisor even when you think you know a better way?” The article states, “If you can’t honestly answer each question with a ‘yes,’ then you should reconsider becoming a franchisee of a strong franchise system.”
If you determine that you’re franchisee material and suited for a strong franchise system, it’s Hampton Hotels for you, according to Entrepreneur’s 2011 Franchise 500®, a comprehensive franchise ranking based on objective, quantifiable measures of success.
If you think now is the right time, and you’re the right person, and you’ve found the right franchise, you should be sure to cover your assets. Pickwell Law in California popped right up when I typed in the search phrase “how to close the deal when buying a franchise.”
Tim Pickwell tells a cautionary tale on his firm’s website: “Some of my saddest cases have involved unprepared folks who leveraged their homes, looted their 401k’s, and bought the wrong franchise in the wrong system at the wrong time. They lost everything. Typically, they saved money by not having a franchise attorney review their contracts.” And don’t forget to cozy up with your accountant, too.
I’ll leave you with a more cheerful thought: Franchises are a proven system. This is but one of the many great things about buying one. A couple of years ago, Franchise Trade asked franchisees from franchise systems large and small, in a variety of industries, and located in all regions of the country, what they thought were The Best, Worst and Most Surprising Things About Being a Franchisee.
Take it from them, not me. What I thought was the perfect franchise for me isn’t a franchise at all – it’s a family-owned business. That means I’m out – and why you need to do your research.