Buying a franchise is an Investment
Buying a franchise is more like making an investment. The current recession has brought forward many reluctant entrepreneurs or ‘forced entrepreneurs.’ They are being called ‘forced entrepreneurs’ because the lack of jobs is forcing them into buying or owning their own business.
If you are a ‘forced entrepreneur’ your situation may be even more challenging as there may not be a lot of money to invest in a new business opportunity. If that is the case, the type of businesses available to you may seem limited however, the good news is that there are many options and here are some of them to consider.
If you are open to the idea of becoming a new entrepreneur, remember you have three choices. Your first choice is to start a new business from scratch. Of the three options of owning a business, this is probably the most difficult. The reason it is the most difficult is that you have to come up with the right business idea, build and deploy all the necessary strategies to make the idea successful and do all of it before you run out of money. Most business owners find that option has too much risk.
The second option is to buy an existing business. This is an attractive option as the seller of the business has developed the concept and hopefully put all the ideas and systems in place so the business is successful. There are many challenges for the business as they need to find a business in a location where they wish to live, ask the right questions and get the right answers to know it’s the right opportunity, have the right finance and credit to buy the business and the right management skills the business needs to continue its success.
The third and final option is to buy the rights to a local franchise. The different franchise options continue to grow as the economy evolves. If franchising is something you are seriously considering it’s important to take the right approach so you make the best decision.
If you would like some more information about each of the three different ownership options to become a business owner, the following link will take you to a free document you can read, download or print – Business ownership options
If the option you are currently considering is buying the rights to a franchise, make sure you make the right decision by keeping one main approach. That approach is to look at buying the franchise as if you are making an investment rather than buying a job or your own business. Yes, this will be your business or you will become a franchisee but it’s not the same as buying an existing business that you can sell or pass to your children.
One of the major items to understand is that as the business operator or franchisee you will never own the business concept. The intellectual property behind the idea always belongs to the franchisor and they offer this to you for a period of time. The period of time varies but it’s typically 10 years. This means, at the end of 10 years you are free to walk away from your franchise and have no further legal obligations. That can be good or bad news, depending on many personal variables. You may be ready for a change or be ready to retire. Equally, the franchisor will have met his legal requirements to you and they can either choose to now take back the franchise and run it themselves or re-sell your franchise.
Buying and owning a franchise is a great business option for the right person. If you prefer making all your own decisions rather than follow a set of rules made by somebody else or want to do things on your terms, a franchise will not be your best option. If the choice of buying a franchise still appeals and you feel it is right for you, approach your final decision as if you are making an investment and you will increase your chances of success.