Finding the perfect franchise opportunity for you can be more complicated than you think. These frequently asked questions are all good things to keep in mind as you search for the right business opportunities and franchise financing for your needs.
What Is Franchising?
When most people think of franchising they think of the food industry, but there are many different kinds. Franchising boils down to the ability to distribute specific products and services with a proven business plan. There are at least two entities involved in franchising, namely the franchisor and the franchisee. The franchisee purchases the rights and business plan from the franchisor for an upfront fee and on-going royalty payments. The main difference between a franchise and a business opportunity is that franchises tend to offer more support as well as the use of a trademarked name. This means that your customers are more likely to be familiar with the brand.
What Should You Consider Before Buying a Franchise?
There are four main things to consider before buying a franchise and finding the right franchise financing.
1. You should consider the amount of experience and number of hours required to operate the business.
2. You should have a complete understanding of the franchise before purchase. This includes learning as much as you can about the franchisor and business plan.
3. Consider how much this will cost you. Namely what are the opening costs, fees, royalties and what volume of products and services will you have to purchase from the franchisor.
4. You should consider getting the help of an attorney specializing in franchises to completely understand the conditions and terms of the contract.
What Kinds of Franchises Are There and In What Kinds of Businesses?
There are many different business models that can be turned into franchises in over seventy industry types. You can find franchises in businesses to satisfy almost any interest that you may have. Cruise companies, specialty stores, family restaurants, and many more opportunities are out there for you to find. You can even find some options which allow you to work from home. There are franchise expositions such as the International Franchise Exposition where hundreds of franchisors showcase their business opportunities. It’s a great place to begin the process.
Where Can I Find Additional Sources of Available Capital?
Franchise funding can come from many different places. Some common sources include loans from private lenders, SBA lenders, investments from friends and family, and even partners. Some franchise concepts will even offer you preferred lenders that they have historically worked with to obtain franchise financing for their franchisees. As long as you have a solid business plan, reasonable credit, and a history or experience in the industry you’re trying to get a franchise loan for, you should not have trouble finding franchise loans from sources such as banks and other lending institutions. See how BoeFly helps Franchisors and Franchisees obtain financing to run their franchise efficiently.
Franchising is a popular way to open a business for all kinds of reasons. When you are looking into franchise financing and trying to find the right company for you, it is a good idea to get your questions answered. You will also want to make sure that you understand the facts of franchising and how to get started.
Other Franchising Resources