Franchises are a great option for people who are looking to be their own boss but may not know where to begin. After all, with most franchises, your marketing, branding, product base, and training opportunities are already set in place. The hardest part may be choosing which franchise best suits your passion! Here are some ways to search and find the best franchise opportunities for you.
Know What Franchise Opportunities Are Available
According to Statista, in 2017 there were more than 745,290 franchise establishments in the U.S. There are thousands of companies in hundreds of industries to choose from! While restaurants are among the most common franchises people think of, there are also opportunities in education, housekeeping, childcare, business services (like printers and maintenance staff) and retail.
First, you need to find out what franchises are available in your state. FranchiseOpportunities.com allows you to search by state or by industry so you can find exactly what you're looking for. You'll undoubtedly find something that suits your interests or is related to your previous experience.
Important Questions to Ask
There are some important facts you should know before you invest even a penny into your future business. Here are some questions to ask to help narrow down your franchise options:
How Much Does It Cost to Buy Into the Franchise?
This figure can be as low as $30,000 or as high as $660,000 (or more!) based on startup costs for the business you choose. For example, Image One is a cleaning company franchise hired by commercial properties. Since there is little overhead (you just need to purchase cleaning supplies, train your staff and invest in minimal office equipment), the average buy-in can be as low as $29,750.
On the other end of the scale, Creative World Schools is a childcare center offering franchises that start at $600,000. These establishments provide their franchisees with extensive curriculum for various age levels. They offer furniture and educational supplies that align with branding, and specialized contractors are available to customize existing structures for the school's needs. As you can see, the costs of materials and setup can vary greatly based on the type of franchise you want to partner with.
How Much Training Will You Need?
Every franchise has its own set of training materials, but some require onsite schooling so you know exactly how to use the equipment, train your staff and align your marketing with their standard branding practices.
Let's say you're interested in owning a Kona Ice food truck. You'll need to visit Kona Ice Corporate Headquarters in Florence, KY and attend Kona Kollege so you can learn their marketing strategies, understand day-to-day operations, familiarize yourself with how to use your food truck (including how to drive it on their safety course) and spend time in one-on-one training with seasoned Kona Ice franchisees.
How Long Until You Start Bringing in Revenue?
This all depends on what type of franchise you're interested in starting. Kona Ice guarantees that you can start making money within 30-60 days of sending in your deposit. Creative World Schools will take longer based on variables like construction time when the school year starts and finding certified employees to fill these specialized positions.
Is This a Good Franchise to Join?
Franchise Business Review is a great resource to check out if you're trying to decide which company to partner with. This site lists recommended franchises based on franchise owner reviews, and you can even educate yourself on the above questions and more (such as what type of support the company provides to ensure franchisee success). The Haagen-Dazs Shoppe, Wild Birds Unlimited, MaidPro and Pinch a Penny are just a few of their top picks.
Do I Need to Choose a Business Entity for My Franchise?
When you buy into a franchise, that means you're legally covered no matter what happens, right? Not necessarily. Generally speaking, the contract that you enter into with a franchisor involves the Disclosure Document (also called an FDD), which covers franchise territory, fees, and responsibilities of both the franchisor and franchisee. The Franchise Agreement section of the legal paperwork addresses trademarks, products, payments, termination of the franchise, training, and advertising.
However, a typical Franchise Agreement clearly states that each franchisee is an independent contractor who is solely responsible for the safe operation of their franchise. So the answer is yes: You do need to create your own business entity, even if you are purchasing a franchise.
For instance, let's say your employee is mopping the entrance to your store when a customer falls and breaks her ankle. Now she is suing you for financial compensation to pay for her medical bills and lost wages. The chances are slim to none that your franchisor will cover your legal fees, so having a business entity such as an LLC will help protect your personal assets. If the courts side with the injured customer, your company will have to pay the designated amount — but your home, bank accounts and other personal assets should not be at risk.
If you're considering buying into a franchise — or if you're already a franchisee and you want to know the benefits of creating a business entity — contact the legal experts at Incfile today. We can help you choose the best entity that fits your needs, and assist you with filling out and filing your legal documents in no time at all. Every business is unique, and we're here to help protect your best interests.