Each time that you see a recognizable brand name pop up in your city, the chances are good that it is part of a franchise. Major restaurants like McDonald’s and Subway use franchise agreements as a way to make more money without doing any real work. As long as you have the cash needed to buy a license and the time necessary to grow that business, you can make money as a franchise owner. Whether you want to open a restaurant, gym, hotel or any other type of franchise though, there are three things that you must do.
Ask About Help
Before you sign any paperwork, ask about the level of help that you will get. This can vary quite a bit between companies. Some companies want to ensure that you help the brand grow and will require that you visit the head office to meet with representatives or that you go through some type of school or training program. Other companies will simply give you some paperwork to read through that tells you what to do. The more help that the company offers, the easier you can open and run your business.
Research Total Costs
The total cost of opening a franchise can surprise some. One of the first things to look at is the total amount that you need to put down just to secure the license. While some companies charge you a set licensing fee that lasts as long as you run that business, others charge an annual fee. There are some companies that charge an annual fee and will take a percentage of your profits. Those companies may require that you order all supplies and equipment from them, even if you can find cheaper supplies elsewhere.
Check the Agreement
You always want to read through the entire agreement or contract carefully and get help from a franchise law office. Lawyers working for that firm can read through the documents and let you know what they find. They can tell you if it is a standard legal document or if there is wording that might harm you in the future. You’ll even learn what happens if you cannot pay your franchise fee or if you decide to separate your business from that company. If you take the time to do these things before you buy, you can make a smarter decision about being a franchise owner.