Interested in a Franchise? Do Your Franchise Profile First
Before embarking on a search for the
right franchise opportunity it’s important to construct your
franchise profile. This article shows how to do it.
Although a franchise includes a packaged
operating system, branding, training and manuals, as franchisee
you’ll be responsible for the day to day operation of the business.
Investing in a franchise is far different than being a company
employee; you are in a different position and can’t leave if you
don’t like the job, your boss or the corporate culture. If you’re
considering investing in a franchise, you’ll increase your
opportunity for success if you can identify franchises that match
your individual profile. This profile should include your financial
resources, business experience and skills. On the other hand,
investing in a franchise that is a mismatch can result in failure
and a loss of your investment. Before you begin your franchise
search, do a personal inventory so that you can construct what I
would refer to as your franchise profile. By starting out with your
franchise profile, you’ll be in a better position to apply your
strengths to specific franchise opportunities.
The Components of Your Profile
These are the areas and questions you want
to focus on when constructing your profile. Be objective and don’t
be reluctant to enlist input from family, trusted friends and
advisors. You should develop a summary or list for each category.
You can then use this information to develop your franchise profile.
- Financial Resources- Identify how much capital you
have available to invest in a franchise. Since most new
businesses, including franchises, do not reach break even
for approximately one year after startup; be sure you have
access to additional capital to provide for unexpected
circumstances, such as a slow launch.
- Business Experience- List your business skills. Do
you have sales experience, have you managed people or do you
have financial experience? What kinds of businesses have you
worked in? What did you like about specific jobs you may
have had? Consider how your business experience could be
strength for particular types of franchises.
- Skills- Do you, your partner or spouse have
experience working in or operating a business comparable to
a franchise you may be considering? Do you have specific
skills such as teaching, accounting, a trade or other
- Personal Factors- What type of work do you enjoy
doing? Are you a people person or the type that would prefer
to work on your own? If you prefer a franchise that
requires the franchisee to generate sales customers rather
than operating from a bricks and mortar location, you’ll
need to have good selling skills.
- Family Considerations- Do you have a family?
Children? Would you be in a position to work the long hours
that most franchises require? Will your spouse be involved
in the franchise? Can you survive the loss of your franchise
investment? Operating a franchise is no different than
operating most small businesses, it requires long hours and
- Preferred Franchise- Identify the type of franchise
you’d like to operate. There are numerous categories of
franchises ranging from food to children’s services.
For some ideas, you can buy a franchise directory or
surf the Internet to view various franchise opportunities.
Of course you know what you can invest so that will allow
you to filter your search based upon the required
After you’ve compiled the
information needed to construct your franchise
profile you‘ll be able to summarize it. Now you’ll
be able to narrow your choice of franchises down to
those that most closely match your franchise
profile. You should aim for three franchises so that
when you start your evaluation, you’ll be able to
compare one franchise to the others.
Only the Beginning
This is the first step in the franchising
process since you’ll need to carefully evaluate each franchise to
determine which one is the best choice for you. There is a good deal
of information available on the Internet that can provide
information and advice for evaluating franchises. After you’ve
started your evaluation be sure to speak with existing franchisees
since they can be your most credible source of feedback when it
comes to the performance of the franchisor. When you narrow your
choice down to a specific franchise you should engage the services
of a franchise attorney to review the franchise agreement. In some
cases, an accountant may be used to analyze the franchisor’s
financial statements and assist you in doing a proforma income and
cash flow statement. Remember, the franchise process begins with
your individual profile.
© 2015 FranchiseKnowHow, LLC
Ed Teixeira is the President of FranchiseKnowHow.com and Chief Operating
Officer, FranchiseGrade.com. He is a former
franchise executive and franchisee. He can be contacted at 631-246-5782 or