Tag Archives: Buy a Franchise

After The Franchise Expo. What Now?

America's favorite franchise expo.

So after attending the franchise expo, what do you have? A lot of questions, in spite of a bag full of literature that you carried home. You can’t possibly process all the information that you heard from franchisors, seminar leaders, attorneys, and moneylenders, but you know there’s something in it for you. Buying a franchise can change your life for the better, if only you make the right decisions. So what do you do now?

Why’d You Go To The Expo?

Post-show fatigue is a real phenomenon. It’s the result of too much information in a short period of time. Many people, because they don’t know what to do, do nothing at this point. Others promise themselves that they’ll review their notes and that bag full of literature, but they never do. Consequently, many people miss out on making a decision that could, in fact, change their lives for the better. Granted, it’s important to understand what you’re doing if you buy a franchise, but isn’t that why you went to the franchise expo? Or did you go for the free food?

If you’re immobilized after a franchise expo, the good opportunities may pass you by. Sure, there’s always another expo, and another opportunity, but that’s what most people think – and most people don’t buy franchises.

Five Steps To Help You Now

If you believe that franchising makes sense for you, and you want to come to grips with a decision to buy a franchise (and overcome post-show fatigue), here are the steps to follow:

  1. Select your favorite brands. Of the franchise brands that you discovered at the expo, which two or three do you remember as potential opportunities for you? Keep whatever information you have about those brands and set the rest of the information aside.
  2. List your questions. What do you need to know to make a decision about buying one of the brands you identified above? Make a list of the questions.
  3. Validate the franchise. Not sure if you’re looking at a legitimate franchise opportunity? Stop worrying. Contact the International Franchise Association at 202-628-8000 or online. Is the brand a member, or at least identified as a franchise by IFA?
  4. Attend a Discovery Day. This is the easiest and the best way to get your questions answered efficiently. Almost every franchisor sponsors a free information day. Ask for an invitation and don’t worry: attending a Discovery Day does not obligate you. This is an opportunity to meet the people who operate the franchise and learn more from them.
  5. Visit a franchisee. Talking with a franchisee may help you take the next step to buying a franchise. An existing franchisee can help lead your way.
  6. If all else fails, there’s one final step: Visit another expo and start all over again.

Attend America’s Favorite Franchise Expo

To that end, you should know that America’s favorite franchise expo, the International Franchise Expo, is set for June 18-20 at the Javits Center in New York city. You can register for free. You may be interested in attending my symposium, The A to Zs of Buying a Franchise – it sells out every year – but there is a fee. Learn details here.

 

8 Reasons To Consider A Lease For Your Franchise

A lease for your franchise?

When you’re buying a franchise you probably need money – most buyers do – and numerous lenders are lining up, especially at franchise expos, to be of service. One option that buyers often overlook is leasing, and it’s worth your time to check out the possibilities.

If you’re investing in a franchise that includes equipment, such as a POS system, or ovens and appliances for the kitchen, or if you need a truck, such as a van, you may be better off leasing than borrowing. Leasing equipment is the equivalent of “renting” the equipment, which means that you won’t take money from your working capital to buy the equipment.

With a lease, you get to use the equipment and pay monthly, and at the end of the lease you can acquire the equipment, or upgrade it and roll the package into another lease.

Here are eight reasons why you should consider a lease when you start a franchise:

·      Hold on to your working capital. Cash on hand is a huge advantage.

·      Claim a tax benefit. Section 179 of the U.S. Internal Revenue Service Code allows you to write off a percentage of a monthly lease payment.

·      FICO requirements are usually lower for leasing. There’s less risk with a lease so credit rating requirements may be lower.

·      There are no prepayment penalties. If it turns out you’ve got extra cash on hand, pay off the lease without a penalty.

·      You can choose the terms: 24 to 60 months. This helps you keep the payment amount in line with your cash flow.

·      If you’re expanding your business by opening a second unit, you may be able to use the first business to guarantee the lease and not have to sign a personal guarantee.

·      Securing a lease may be faster than securing a loan – especially if you’re leasing an equipment package or a vehicle that’s recommended by a franchisor. Leasing companies like franchise deals.

·      Closing costs are minimal: almost always less than $500.

There are few disadvantages to a lease. Of course, you still need to provide personal financial information and provide a variety of documents to the lender, but this is all the easier when you’re buying a franchise. Savvy franchisors develop relationships with leasing companies to expedite franchise sales and development.

You’ll find more information about franchise financing in my Amazon best-seller: 12 Amazing Franchise Opportunities for 2015. Chapter 2 is titled Funding Your Franchise Acquisition.

 

 

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Prospective Franchisee: Do You Have This Skill?

How To Franchise Your Business | Best Franchise

Recently I wrote about What To Do Before Buying A Franchise and I suggested a couple of questions that you could ask yourself before deciding if franchising, as well as business ownership, made sense for you.

I pointed out that it takes skills to operate a business or a franchise and I also said that franchisors will teach franchisees the skills needed to succeed in business — of course, that’s relative to the franchisor and the situation. Remember that not all franchisors are created equal; some do a better job than others when it comes to training and other operational issues.

The Must-Have Skill

But then I said there’s one skill that can’t be taught. In fact, this skill will make or break your success in franchising. Without this skill you do not have much chance of succeeding in franchising and, in fact, without this skill you should not invest in any franchise.

What’s the skill?

The ability to follow direction!

Sounds simple, doesn’t it? But not everyone possesses that skill.

Is THAT A Skill?

In fact, some people would argue that that’s not a skill. Call it what you want (it’s a skill!) if you don’t have it, you’re not cut out for franchising.

If you’re a regular reader of this blog, or you’ve read my books, or you’ve heard me speak about franchising at a public forum or over the airwaves, you know that I’ve described franchising as a series of systems.

It’s All About Systems

Systems lead to success in business and especially in franchising. There’s a system for marketing. A system for sales. A system for operations. If a franchisor doesn’t have these systems, do not invest in that franchise!

Even if the franchisor has the systems, no matter how good they are, if you don’t have the skill of following direction, do not invest in that franchise, or any franchise!

Franchisor May Say “No”

If you do lack the skill, hopefully a franchisor will discover it and not accept you as a franchisee — but, once again, not all franchisors are created equal. Some need the money that comes from selling franchises, so they may let you slip by and hope for the best.

If you cannot follow direction (or you just don’t want to), how do you expect to succeed in a franchise? If you’re the type of person who wants to reinvent the wheel, or you need to ask Why? when you’re told to do something, franchising isn’t for you. Franchisors know that — now you do, too.

 

What To Do Before Buying A Franchise

skills

Where to begin? That’s the problem for so many people when they think about starting a business, or buying a franchise.

The crazy thing is that it almost doesn’t matter where you begin, as long as you do!

And I don’t mean “as long as you do” as a way of saying it’s a mistake not to start a business, or buy a franchise. I mean “as long as you do” as a way of saying it’s better to find out if business or franchise ownership is for you than to continue wondering about the possibilities until it’s too late.

BEGIN HERE

Should you or should you not start a business or buy a franchise? Why not begin there? It’s as good a place as any, and thinking it through won’t cost you any money!

People seem to assume that they can start a business or buy a franchise. It’s easy enough to do either, but that doesn’t mean you should. Even if you have the money, and even if you have a great education, it doesn’t mean you’re cut out for business ownership.

WHAT ARE THE QUALIFIERS?

Some of the wealthiest people have failed at owning a franchise; and some of the smartest people have done some of the dumbest things while owning a franchise. So money and education are not necessarily qualifiers.

What is?

Skills!

That’s another good place to begin. Do you have the skills to start a business or to operate a franchise? Let me tell you: Most people do not!

CAN’T TEACH THIS

Of course, (most) skills can be learned, and (some) franchisors teach franchisees the skills they need, but there’s one skill in particular that can’t be taught. I’ll tell you about that in a future article.