How to Buy A Franchise: A Simple Guide

As we emphasize, there is no such thing as the perfect franchise. Since franchises come in all sizes and shapes, the goal is to make the perfect match: Choose the right franchise for you. And, frankly, not every franchise is suitable for everyone.

One of the most important aspects of this search is to start with the right frame of mind. First, throw out all your preconceived notions about the type of business you always dreamed of operating, or the one your mother/father/best friend said would be perfect for you. 

Your best tool is a fresh set of eyes. The truth is you can never tell what type of business will end up rising to the top after a thorough research process. 

Sometimes listening to your research is easier said than done. My own experience selecting my first franchise provides a perfect case in point.

When I started the franchise exploration process, one of the first questions I sought to answer was: How many local competitors are there? In my region, I found about 70 senior care businesses. I immediately concluded that 70 was far too many, the market was too crowded for another company, and I should check out a different business sector. Fortunately, I realized I was merely making an assumption. I gave myself the advice I often give to my clients: Test that assumption. Was the market really too crowded?

I did my research, which showed there actually was room in the market. When I completed my research, I moved forward and invested in a senior care franchise.  Buying that franchise was probably the best business decision I’ve ever made.  If I had not decided to test my assumptions, I would have passed right by that excellent opportunity,

I have laid out some pointers that will help you make the most of your time as you begin your research. Before you begin, you might want to review the work you completed at the end of Part I. Keep in mind your unique portfolio of skills as you read.

How to Select the Right Franchise for You

Evaluate the Role of the Owner

During your research on the ins and outs of the franchise system, pay particular attention to the role of the owner in operating the business. This means the types of tasks you would spend the bulk of your days doing. Some owners spend much of their time building clientele, while others manage employees or operations. 

You should have a clear understanding of what the franchise company expects owners to do to maximize success. Not only do you want to ensure your skills and experience match this job, but you want to make sure it’s a job you want.

Separate Your Business Decision from Your Passion

When it comes to running a business, your main job will be managing the business, no matter what product or service you’re selling. Consequently, what should concern you most is the day-to-day work required to succeed, not the type of business. You want your decision to be driven first and foremost by how much you want to take on the role the owner has in this business. 

The role of the owner is as important as the tasks of the business.  Just because you love cooking doesn’t mean you want to jump into the restaurant business. After all, most restaurant owners aren’t in the kitchen. They’re managing the front of the room, greeting customers and supervising staff. Consequently, this job often requires the owner to be a people person and effective manager.

Maybe you’ve been thinking for almost all your adult life about how you might like to open a little bakery or café because you love to bake and would enjoy having all your friends drop by for socializing and coffee. You might want to look more closely at what the owner of the business does. What you’ll likely find is that the owner is mainly responsible for managing employees and marketing, focusing on building a customer base to grow revenue.

Generally, the number-one goal of the owner is to build the business, using marketing and advertising. Or the owner might focus on attracting, training and retaining top-notch employees, which allows you to earn a good income, have happy, productive employees and an ever-expanding customer base. This is why your business search should begin by first considering the role of the owner.

You should like—preferably love—what you do day in and day out. But you don’t want to limit your choices by linking your selection process to your passion.

This is why it can be a mistake to eliminate businesses that may at first seem less than desirable. Some of these have the capacity to earn you a terrific income—and you may, in fact, love the job of being the owner of that business. 

The point is what owners do can be far different from the work of the business.

A prime example is a home cleaning business, which may not sound appealing if your thoughts immediately center on scrubbing and mopping. But just as many restaurant owners succeed without being culinary geniuses, owners of home cleaning businesses won’t be wielding a mop or cleaning toilets. 

Owners work on training a stellar crew to do a great job. They spend their time identifying which employees have the capacity to become leaders and managers, and then they groom and develop these people. The owner focuses on the advertising programs that help them acquire a stable of steady clients that will provide repeat business over many years.

The average owner of one great residential cleaning franchise we work with, after establishing his or her business over the first two to three years, achieves annual revenues of more than $1.1 million. The margins are terrific, with the typical owner earning an income of over $240,000 a year. This is just the average owner, not the top franchisees, who obviously do better, sometimes four times the average income.

And while you may have to work lots of hours at the beginning, by about the third year, most owners work only 35 hours per week. By then, you’ve hired a training manager and maybe a quality control manager, and you’re managing the managers and focused on marketing and advertising programs, such as direct mail. Turns out, contrary to your first impression, the strengths you need to run a successful cleaning service center more on developing and managing a team.

While a home cleaning business may not sound sexy, what matters is the substance. This is a business that is fairly resistant to economic downturns, tending to do well in both strong and weak economic periods. When it comes to choosing a new business, widening your search. Remain open-minded to businesses that you may have been too quick to cross off your list.

If you’re not sure how to answer this question, a franchise coach and consultant can be a big help during the franchise exploration process.

Match the Role of the Owner with Your Skills & Experience

Now that you know the owner’s job profile, the question becomes, does this suit you? This is why you need a realistic appraisal of your skills and experience, so you get into a business where you can enjoy your work and apply your talent and skills for long-term success.

Review the inventory of your business skills and dig a little deeper. Don’t forget to consider your interests. After all, you want to end up with a business that allows you to enjoy going to work, as well as an opportunity to excel!

Ask yourself, are you proficient in and do you like:

  • Managing people – Give some thought to the type of employees you prefer.  There can be a big difference between managing a white collar or blue collar staff.
  • Networking – Can you connect with people who can help you grow your business?
  • Developing relationships – Developing repeat clients is all about building relationships. Make sure people know exactly how you will provide excellent service. That way you can earn the trust and confidence of repeat customers. 
  • Working with people – Or do you prefer working on your own?
  • Marketing – Which might include advertising as well as making presentations?
  • Selling – This always includes selling yourself, as well as your products or services.
  • Getting into the details – Or do you prefer to delegate?

When you choose a business, you’ll be thinking about the job of the owner and whether that job suits your interests and skills. By all means, be honest with yourself because if you’re not, you will be the one who pays the price down the road. 

The Keys to Making the Right Franchise Selection

What Do You Want, Exactly?

As perhaps the most difficult question of the bunch, you should get a fix on your goals, your constraints and your personal aspirations. You should know how many hours you want to work. Are days or nights preferable? Do you want to work part time? Do you want employees? Do you absolutely hate sales and so you know you won’t do well in sales? Do you like working with people? Do you want to work at home, or in an office full of people? Do you want a one-person operation, or do you eventually want a chain of shops or offices? 

There’s a franchise for all of these preferences. Determining what you want will save you a lot of time down the road.

Figure Out if Your Dream Business Measures Up

Still set on opening that little shop around the corner where your friends can always find the bauble of their dreams, or perhaps you have in mind a charming little bed-and-breakfast to be your own vacation paradise? Maybe you’ve got the TV ideals in mind, like the bar in Cheers— “where everybody knows your name”—or the little Vermont inn that Bob Newhart called home for years.

Sounds delightful, but, as we’ve discussed, running a business is much more than dreams of fun times and quirky customers. Reason must overrule passion. You might be able to find the business that matches your dreams, but I can’t emphasize enough, your most important consideration has to be the business of the business. That means figuring out if you have the right skill set to succeed in a particular business.

While it’s good to have lots of ideas and a great passion, you don’t want to skip the mundane-but-essential practicalities.  If the actual work of the business bores or scares you, instead of getting the little business of your dreams, you may end up with an efficient mechanism for draining your savings.

While you may enjoy the romantic ideal, ask yourself the practical questions so you can determine if this endeavor is really for you.

Five Questions to Help You Get to the Crux of the Numbers and Sense

1. Do you mind getting to work at 5:30 a.m.?

Because when it comes to that little B&B or a coffee shop, that’s when business hours begin. Or maybe even earlier. When it comes to the hospitality business, if the customer has a problem, the buck stops with you day or night.

2. Will the local market generate sufficient earnings?

You may think you have the perfect concept to attract folks who didn’t know they needed what you have to offer. And maybe you do. But you’ll need to know how to generate buzz. Then keep them coming for more. What if you’re not a marketing wizard? Then you had better align yourself with a franchise company that is strong in assessing a market and attracting customers.

3. Have you figured out how much money you need to earn to cover your costs?

You need to be prepared with sufficient capital to run your business until you can earn a profit. If the romance—high-end design, fancy Italian espresso machine—in your shop costs more than your earnings can justify, you will have a problem. We highly recommend you consult an accountant to go over whether you have enough to cover your costs to operate.

4. Will the local labor pool support your needs?

Hiring and retaining a good staff is critical. Can you find the workers you need in your area? Does the franchise offer you the tools you need to help you recruit, manage and retain a conscientious, reliable staff?

5. How many hours are you prepared to work per week to start?

Every business requires its own unique schedule from the owner. Make certain you research how many hours the owners work in the franchise you are considering. If you have a lot of other obligations, you may want to reconsider a business with an extremely demanding schedule. You will find plenty of options where you won’t have to work more than 40 hours per week. It may be even less in the semi-absentee franchise category, which offers opportunities in businesses that require a maximum of 10 to 20 hours per week.

Don’t Let Lack of Experience Keep You Back from Buying a Franchise

I’ve met lots of people who fear going into business because they’ve never done it before, or they don’t think they can sell or manage employees. But not all businesses require every skill, and the best thing about a franchise is that it comes with a set of experts to help you learn new skills. What I often tell my clients is “Just because you don’t like sales doesn’t mean you can’t own a business.”

That’s right. Contrary to popular belief, you can be a successful entrepreneur even if your strength doesn’t happen to be cold calling and glad-handing. Opportunities abound with businesses whose customers are drawn in by an effective marketing campaign or a great location. Just think about the shops you notice on your way to work.

Many businesses don’t require the owner to be involved with sales. Some large franchise organizations rely on advertising to generate business. In addition, customers may actively seek out a conveniently located operation, often without realizing it’s an independently owned franchise. Just to give you a taste, here is a small sample of franchise types that fit these categories:

  • Health and wellness
  • Pack and ship service
  • Lawn care
  • House painting
  • Maid service
  • Home maintenance
  • Hair salons
  • Academic tutoring
  • Pet services

The trick is to make a good match with a franchise that has an established record of working to develop new franchisees into successful members of their team. Working with a franchise coach can help you use your time most efficiently. Let a franchise coach direct you to operations that have the best time-tested systems and a solid track record.

This blog sourced from and accredited to Dan Citrenbaum, Author of Own Success; 
Permission granted by Dan Citrenbaum.