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What to do before "Buying a Franchise" - Many Hispanics are getting into the franchise business. Hispanics often make successful franchisees, in part because they are typically hard working and in a position to benefit from the strong support of the local Hispanic community.
The Hispanic market, with its high percentage of teenagers and young people, is especially fertile for franchises selling things like clothes, shoes, athletic gear and electronics.
Bying a franchise basically allows you to purchase "baskets of benefits" the best of which are brand name recognition, the being able to buy in bulk and and mass advertising, training, and a set formula to follow for your product or service.
But franchising will not suit every budding entrepreneur. There are often high costs and royalties to pay. There is often a brand structure that tightly controls what an independent operator can do and contracts littered with restrictive clauses.
In the United States there is an estimated 800,000 franchise outlets. Below are some tips you need to know before you invest. - Talk to a lot of other franchisees and visit their sites, even if they are outside your area.
- Spend a couple of hours there, maybe a whole day, just watching traffic in the business and asl may questions.
- Use the Internet to find franchising opportuniies, contact more than 50 owners before you move forward.
- Please be ready to wlrok hard and log hours. The reality is you have to be prepared to pitch in any time and not be afraid to do the dirty work. Many franchisees work 90 to 100 hours a week. Often that includes doing tasks such as cleaning toilets.
- You Must Know The Costs - Most franchises don't start making money until they've reached 18/24 months of operation. It's critical to know that the primary reason most franchises fail is under-capitalization.
- Getting the money can be a problem because banks have tightened up on lending. It helps if you're looking at an established concept, have some experience in the field, and have another source of income.
- Look For The Track Record - Franchise expos are filled with exhibits from untried and untested companies. Stay away from any franchise that doesn't have at least 30 to 50 operating businesses. There's strength in branding, whether at the national or regional level. Branding is an umbrella of goodwill in bad times.
- Only Start With One - Don't be tempted to buy more than one franchise, regardless of how good the offer from the franchisor may seem. If you end up with 5 or 6, you're probably going to run out of money. It is far safer to be cautious. Only when the first franchise is established and turning a profit, should you consider expanding.
- Hire a Lawyer - Not just any lawyer, you need a lawyer attorney who specializes in franchise law to look over the contract and the pages of supporting documents.
Buying a franchise is a big step for just about every entrepreneur. It can be risky, but it can also be exciting and profitable, if you take your time and make careful decisions. Hopefully, the six steps above can help you do just that |
