Many sites list franchise opportunities, making it easy for prospective owners like you to find and compare options. But, sometimes, franchise options can be overwhelming. This is especially true when you haven’t decided on the industry you want to serve, the personal skills you want to apply, the goals you hope to attain, or even how much you can afford to invest.
Other factors should weigh into your search, too. Before moving forward, try to make the following decisions:
Which industry do I want to serve?
Many franchise owners thrive when they find operations that suit their interests. Alignment isn’t a must-have for your success as a franchise owner, but it can be a good place to start.
Think about the ideas, hobbies, and activities you enjoy performing and talking about. Which pastimes would you love to be compensated for performing? Which populations would you enjoy serving?
Right from the start, many franchise owners have strong opinions about operating in certain industries. You may, too. With that in mind, look through this list of popular franchise categories, and jot down the ones that you’d like to consider:
- Full-service restaurants
- Quick-service restaurants
- Convenience stores
- Gas stations
- Car washes
- Clothing stores
- Shoe stores
- Beauty, massage, or spa operations
- Gyms
- Cleaning operations
- Lawn or home services or repairs
- Hotels or motels
- Real estate agencies
- Insurance agencies
- Tax services
- Car dealerships
- Car servicing centers
- Shipping services
- Preschools, daycares, or learning centers
- Children’s sports clubs
- Pet stores
- Medical or vision services
Which skills can I apply?
Next, think about the skills, knowledge, and experiences you have that could help you to thrive as a franchise unit owner:
Skills
Are you a talented people manager or a whiz at technical support? Are you a superstar in sales or a boss at bookkeeping? List any of the talents you have that could help you achieve success.
Knowledge
Are you well-versed in vehicle mechanics, sports equipment, home repairs, or planning events? What knowledge do you have that you could apply to help others achieve their goals? Keep a running list of those topics.
Experiences
Do you have experience managing people, overseeing deliveries, ordering supplies, or working through compliance-related concerns? Have you risen through the ranks of a restaurant, retail store, or another operation? What are some other experiences you could put to use as the owner of a new business? Start building a list of experiences you could apply to a new venture.
Once you’ve found your interests, skills, knowledge, and experiences, start looking for links. What have you achieved and found enjoyable? Where do your knowledge and interests align? Make notes on any connections you find.
What goals do I want to attain?
Any investment you make in a business should help you achieve the financial or personal goals you’ve set for your life.
Let’s focus first on the financial piece. Do you want to supplement the salary you earn from your day job? Are you hoping to replace the income you earn today? Are you dreaming bigger and wanting to achieve new levels of wealth? Name your financial goals and allow them to drive your search.
Next, let’s think about personal goals. Your life goals could include having more time to spend recreationally or with family. You may want more freedom to pursue other ventures or flexibility to do what matters most to you. Here, again, name what matters to you and keep these objectives front of mind.
The right franchise opportunities—attained at the right price, in the right geographic market, and in the right economic climate—should help you achieve both sets of goals.
With this in mind, spend time clarifying precisely what you hope to attain through franchise ownership before beginning your search. This will help you focus your search on opportunities that could contribute to your financial and personal goals. It will also help you avoid getting sidetracked by opportunities that aren’t likely to bring the outcomes that are most important to you.
How do I want to use my time?
Many franchisors set minimums on the amount of time franchise unit owners spent at their site each week. Others allow owners to work remotely without meeting time requirements. Because these requirements direct how and where you’ll spend your time, you might want to make site requirements an important consideration in your search.
Does your location matter to you? It might. Try working through the following exercise to get some clarity:
Start by imagining your ideal location. Do you picture yourself working happily in a retail setting? What about in a customer’s home or office? Would you prefer to work from an office space or a home office? Could you envision yourself working in a garage or outdoors? Would you rather work closely with customers, or would you prefer a role behind the scenes?
Next, think about how you’d prefer to spend your time. Do you hope to find a role you can perform part-time, or are you looking for a full-time career position? Are you comfortable working evening or weekend hours, or do you plan to search for opportunities that would give you a standard 9-to-5 schedule?
Keep your preferences for location and working hours in mind as your prepare for your search.
How much can I afford to invest?
A hugely important factor in your search should be the total cost of buying and operating your franchise unit. There are costs beyond the initial franchise fee to consider. Often, these include real estate leases or purchases, equipment purchases, initial inventory requirements, signage, advertising fees, and working capital needs. Representatives at any franchise you consider should help you estimate these costs before you make an investment decision.
Here’s something to note. Most franchisors require prospective owners to have a certain amount of cash on hand to cover the initial acquisition and operating expenses. Many also have minimum net worth requirements. Do you know where you currently stand? Be sure to make both calculations before starting your search:
Cash on hand
Start by determining how much cash you can pull together from your savings accounts, investment accounts, and retirement plans to purchase a franchise unit. You may consider partnering with another entrepreneur for greater purchasing power.
Net worth
Calculate the total value of your assets, including your home, vehicles, insurance policies, and cash and cash equivalents. Then, subtract your debts and liabilities to arrive at an estimate of your net worth.
The startup costs will almost certainly exceed your franchisor’s cash-on-hand requirements, so you should also make a plan for attaining the rest of the capital you’ll need for operations. In Your Go-to Guide to Financing the Purchase of a Franchise, we cover many of the financing options you can use to cover these costs. These options include franchisor financing, SBA loans, term loans, asset-backed financing, and retirement plan access through loans, distributions, or rollovers as business startups (ROBS). Dive into this article here:
How large of a geographic area am I willing to consider?
Define your target area of operations, and decide how far outside your preferred region you’re willing to search for the perfect opportunity. You might begin by focusing on the town in which you reside, but by broadening your search to opportunities with a 15, 30, 50, or 100-mile radius, you could find a greater number of opportunities that align with your skills, interests, and goals.
How can I find franchise opportunities that meet my criteria?
One of the most popular ways to find franchise opportunities is by visiting franchise listing sites. Some sites are targeted, focusing on a narrow industry, type of business, or geographic region. Others include listings for a wide range of businesses but allow you the option to filter and home in on the right kind of business for you. Some of the most popular sites include bizbuysell.com, franchiseforsale.com, and franchisegator.com, but our favorite is the International Franchise Association’s site. It includes more than 1,400 franchisors and easy-to-use search features.
There are many other listing sites to browse through, but most franchise opportunities appear on multiple platforms. You can visit each site regularly, or you could focus your attention on the site that best meets your needs.
Most sites will allow you to filter franchise opportunities by location, industry, and cash requirements. Once you narrow your search by those parameters, you’ll create a shortlist you can work with. Then, you can decide how well an opportunity aligns with your skills, knowledge, and experience and how likely it is to help you reach your personal and financial goals.
Can a business broker help me find franchise opportunities?
Yes. You can work with a franchise broker, coach, or consultant to find opportunities that meet your needs. Most will assist you for free, but it’s important to note that they’re paid by the franchisor for connecting you to their operation. Because of this, it can be difficult to discern whether a broker, coach, or consultant has your best interests in mind or is pushing you toward an option that will help them attain a large payout.
You can learn more about working with a broker, coach, or consultant in our guide, Who’s on Your Team: Navigating Brokers, Coaches, and Consultants.
I’m interested in a few franchise opportunities. What should I do?
Visit the website of any franchise opportunity you’re considering. Most will have a portion of their site dedicated to prospective franchise owners. Here, you’ll find a toll-free phone number, a frequently asked questions page, and other information that will help you get started with your inquiry.
After connecting with a franchise representative, you’ll likely receive promotional materials and a franchise disclosure document (FDD) that discusses the costs, benefits, and requirements of owning a franchise unit. You can learn more about the FDD here:
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You, your attorney, and your accountant will spend a great deal of time studying your target franchise’s requirements and completing due diligence before you proceed with a purchase. We have two guides that can help you with these steps:
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Looking for support through the franchise acquisition process? We can help. Log into your owner’s portal for articles, checklists, and advice you can use to make your venture a success.
