Currently, franchise businesses provide millions of jobs in the United States due in part to the many advantages that are associated with owning one: 

For any potential business owner, the question comes down to if running a franchise will be the right fit. One of the first decisions that you have to make is selecting a concept that feels comfortable to you. Following this, you are going to need to know how to evaluate a franchise so that you will know if this is going to be the correct path to choose. When using the VR Franchise Showcase to select the right choice, there are some pivotal guidelines that all franchisees must review before deciding to buy.  

DOES THE FRANCHISE OFFER TRAINING AND OPERATIONAL SUPPORT?  

 

Training is one of the most important assets that a franchisor has to offer. Armed with the proper knowledge that is gained in training classes, the franchisee is better equipped to overcome the obstacles that block the path of success in business.  

 

How In Depth is the Training?

Always remember that any classroom or on-site training should run at least two weeks or greater. You should receive a comprehensive array of training and other support materials. These should not only cover all daily aspects of business but other general topics such as the preparation of a business plan, accounting and marketing. Remember, the more extensive the training, the more that you are likely to succeed in the business.  

 

Operational support is fundamental to the success of every franchised unit. The franchisor should be available by phone to answer your questions as they come up as well as stay in touch with you on a regular basis. Additionally, the franchisor should have a system in place to periodically evaluate the franchisee and offer advice to better improve your operation.  

 

DOES THE FRANCHISE OFFER COMPREHENSIVE PROMOTIONAL PACKAGES?  

 

You want to find out if the franchisor has created banners, flyers, door hangers, posters and advertisements available for your grand opening day as well as other holidays throughout the year. Good franchise companies will also send their representatives to assist you in store set-up and grand opening promotions. The first few days can be very hectic and confusing; therefore, a representative should be there to help you.  

 

WHAT MAKES UP THE FRANCHISE FEES AND WHAT IF THEY APPEAR TOO LOW?  

 

Remember that low fees mean that the franchise company cannot provide the support that is necessary to assist other franchise owners. Legitimate franchise companies have a long-term interest in your continued success, whereas some of the less scrupulous franchise companies outright avoid disclosure laws that are associated with franchising. Those kinds of franchisors will only exist for the short term, and have less than savory agendas.  

 

WHAT DOES THE UFOC SAY ABOUT THE FRANCHISE?  

 

Keep in mind that the Federal as well as most state governments has rules and regulations regarding the content of the offering documents in a format called the Uniform Franchising Offering Circular (UFOC). It includes the following:  

Per Federal Law, the UFOC must be given to the prospective franchisee at the first meeting between the franchisor and the franchisee where the purchase of a franchise is seriously discussed. Additionally, franchisors cannot accept funds until you have had ten working days to review their offering circular. Think twice if a company is asking for your money at the first meeting.  

 

WHAT IS THE FRANCHISE’S TRACK RECORD IN BUSINESS?  

 

One of the most crucial factors for evaluating any franchise is to look at its track record. Steer clear of franchises that have low success rates. Usually, most franchises have a higher success rate than start-up independent operations.  

 

HOW LARGE IS THE FRANCHISE’S REGIONAL/NATIONAL SIZE?  

 

You want to search for a franchise that is large enough to ensure that its franchises benefit from a large network base. One with such an extensive system can provide economic support in areas such as supplies and advertising. To do this is simple: if you immediately recognize the logo of the franchise prior to doing any background research, chances are that the franchise is of network proportions.  

 

Look at the position that the franchise has had in their industry. In every industry, there will eventually be a weeding out, starting with the independents and small chains. Try to look for the leader in that industry by calling franchise organizations such as the International Franchise Associations and reading industry publications that publish annual ratings of such companies. These ratings are made by independent organizations and are excellent sources of information.  

 

DOES THE FRANCHISOR ASSIST WITH SITE SELECTION?  

 

Like any business, an important element for success is a good location that will give you access to large numbers of your target market group and increase the store foot traffic. Look for franchises that offer on-site assistance and/or approval of each franchise site for its owners. Determine if the franchise grants territorial exclusively as most give some kind of assurance that competing facilities will not be placed in the exclusive trade area of your franchise that is determined by demographics, population density and the number of clients that are required to support a franchised outlet. Your exclusive area should be large enough to allow the business to prosper, yet small enough so as not to leave space for competitors to enter.  

 

WHAT DO THE CURRENT FRANCHISEES THINK?  

 

One of the simplest ways to get information when researching is by calling individual franchisees and asking them some simple yet targeted questions. They are the ones that have been in the same position as you, so pick their brain and get a perspective from the inside.