When I meet with franchise candidates, one of their biggest questions is often how to buy a franchise that fits their specific situation. The options can seem endless. After all, franchising covers hundreds of industries, with thousands of brands available. My advice is always the same: you’ve got to follow the right process. In particular, I have a 5-step path I take with my candidates to help them ensure that they’re investing in a business that works both for their wallet and for their lives.
Step 1: Self-Assessment
When you’re thinking about how to buy a franchise that fits, you have to start with you. In particular, it’s crucial to know your why. Do you want to become a franchise owner for the wealth-building potential? Schedule flexibility? Mental and social engagement? Something else?
You can also think about these factors as your non-negotiables. What are the root reasons you’re considering franchising, and what are you not willing to compromise on? When you answer these questions, you’ll gain a better sense of your must-haves, which will help narrow down your list considerably.
Step 2: Lifestyle Assessment
Your lifestyle assessment will flow easily from your self-assessment. This part is about evaluating the kind of life you’re living now, and the kind of life you want to live as a franchise owner. Most of my candidates are corporate executives, so the lifestyle I see most often is not a good one: working 50-60 hours a week, no time with the family, not able to exercise or eat healthy because of so much time in the office or on the road. I lived that life, and I know the toll it takes. For candidates in this situation, the goal is usually to gain freedom and some control over their own schedule, without sacrificing their wealth-building ability.
Other common situations I see:
- Families that are planning to relocate (often back to the husband or wife’s hometown) and want to jump-start their livelihood in the new city
- Parents with young families who want to stay closer to home and build wealth for college funds and a family legacy
- Middle-aged adults, especially women, who need flexibility to care for both school-aged children and aging parents, but love the challenge and engagement of full-time work
- People who’ve been retired for a few years and are feeling bored or disengaged
Franchising is an excellent solution for all these situations – but which franchise will depend on exactly what lifestyle you’re trying to achieve.
Step 3: Industry Assessment
A lot of my candidates fall prey to a common misconception: they want to choose their franchise based on their hobbies. For instance, I get a lot of golfers who want to buy golf-store franchises. But many of them enjoy the sport as a solo hobby. They love the meditative nature of several hours alone in a peaceful outdoor setting. That’s the exact opposite of a retail environment! Their love of golf has nothing to do with the skills needed to succeed as a golf-store owner.
In other words, choosing the right franchise industry – and the right customer type and operational model – is more about your skills and experience than it is about your hobbies or interests. Are you an excellent strategic thinker and builder? A multi-unit executive franchise could be a good fit for you. Do you excel at in-person mentoring? A brick-and-mortar franchise with a team to manage will be best. Have you spent most of your career in a B2C or B2B industry? Choose your franchise accordingly.
Step 4: Financial Assessment
This is where the rubber really meets the road. You’ve narrowed down your list based on your personal why, your lifestyle goals, and the best match for your skills and experience. Now you need to look at what you can actually afford.
A couple of factors are important here. First, look at the money you have available for startup costs. That will determine which brands are within reach, and whether you can sign a multi-unit contract or need to stick with buying a single location. And don’t worry if you don’t have a million-plus to spend: plenty of good franchises are available at more affordable prices. Second, consider your financial horizon. Do you need to replace a full-time income ASAP (e.g., because of a layoff)? Or can you wait 7-10 years for the payoff? Your answer will make a big difference in the type of franchise you should select.
Step 5: Culture Assessment
Your final step for how to buy a franchise that fits? Whittle your list down to franchises with the right culture and support level for your needs. The remaining companies are the ones you should pursue.
This final step is crucial because a franchise is typically a 10-year venture. That kind of partnership requires more than a good logo. It will only succeed if you have the right connection with the corporate office and your fellow owners, share the company’s values, and can access the support you need to execute on the business model. In short, culture will determine whether you’ll thrive, survive, or bail out early.
How to Buy a Franchise That Fits
So where do you get all this information? You can find it on your own, of course, with lots and lots of Googling. You can also enlist a franchise consultant to help you with the process. Consultants work from a pre-vetted list of franchisors to help candidates find the right fit. That doesn’t mean we’re limited in the options we’ll recommend – it just means we’ve already narrowed down the list to the best of the best, so you can move forward with confidence.
No matter how you build your franchise list, I also recommend paying very close attention during the due diligence phase. In particular, I strongly recommend speaking to other franchise owners in the network as part of your decision-making process. They have the real-life insights that can help you close the deal that’s right for you and avoid the one that’s not.
Comments are closed