What You Need To Know About Franchising Before You Invest

Franchises are extremely popular in the United States, with approximately 773,603 franchise establishments currently operating. These franchises have a total market value of roughly $787 billion in the U.S. alone, so it’s not hard to see why becoming a franchisee is an attractive concept to many aspiring entrepreneurs. For those interested in becoming business owners, it can be hard to argue with the advantages of a franchise opportunity. Investing in a franchise with a well-designed business model can save much of the hard work that goes into starting your own business, such as developing products and services, choosing a location, and establishing relationships with suppliers and merchants. You’ll also already have a well-known corporate image, as well as the brand recognition that comes with it.

It’s important to point out, though, that investing in a franchise business isn’t an easy road to success. One of the most common mistakes that would-be franchise owners make is believing the myth that a franchise is less prone to failure than other business models. In reality, a franchise can go out of business just as easily as any other, so you’ll need to thoroughly research the business to determine if you’re a good fit before investing. While wanting to be your own boss is a common motivator for entrepreneurs to start their own business, it’s not a great reason to become involved in a franchise. A franchise is all about conforming to an established norm, so it’s not the best fit for someone seeking more freedom in their work. Here are a few more important things you’ll need to know before you invest in a franchise.

You’ll need to cover more than the franchise fee.

You'll need to cover more than the franchise fee.

While it may be tempting to simply look at the franchise fee to decide if you can handle the investment, the truth is that you’ll still incur marketing costs so that existing customers can find out about your new location. While many franchisors recommend planning for three months of expenses, it can actually take up to a year before a franchise starts becoming profitable.

If you don’t think you have enough money in your normal bank account to cover the upcoming expenses, then you may need to resort to using cryptocurrencies to cover your costs. Assuming you’ve gotten into crypto options like BTC, Ethereum, and Litecoin, you can find crypto friendly banks that will let you easily view your crypto portfolios and switch your crypto to fiat currency to cover your initial business expenses.

You need to have an end game in mind.

There are plenty of great franchising opportunities out there that can fit most personality types, but you need to know why you’re getting into the business in the first place. Are you looking to run a franchise for just a few years because you need short-term profits? Do you intend for the franchise to be your career? Do you want to leave your franchise to your children one day? Some franchise opportunities are better suited to short-term goals, while others are perfect for a long-term strategy, so knowing what you ultimately want to do will help you choose the right opportunity for your goals.

You need to speak to other franchisees.

You need to speak to other franchisees.


During your due diligence process, it’s important to speak with other franchisees in the field you’re considering, preferably even ones from the same business. See if they’ve found ways to make your success more likely or how they’ve overcome the most difficult challenges. Even franchisees who weren’t successful can give you advice on what went wrong or what they’d do differently if they were in your position.

A franchise can be an incredible opportunity, but like any business, you need to know what you’re really getting into before you can decide if it’s the best fit.

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