Thoughts of opening a business stir excitement and hope, but the process can prove challenging and discouraging. For many people, a franchise represents the perfect opportunity, especially for those in the resale business, because of the established brand and business model. Understand what it takes to open a resale franchise business and you’ll have the needed information to decide if you should use a franchise to build your career.
Shopping for a Resale Franchise
While looking for a resale franchise, look for a brand that has a positive image in the marketplace and has terms and conditions you can accept. Franchisors have developed their brand in ways that make them suitable for investors who want to profit from the success of their brand.
Becoming involved, however, usually requires a minimum investment and a commitment to various policies and procedures. The rules encoded in the franchise contract enable the owner of a brand to ensure that independent owners will maintain the quality of the brand or service in a way that ensures consistency across the country or around the world.
Franchisors often assign protected territories that contribute to ensuring that a new franchise has enough potential market share to become successful. Brand owners, however, have much leeway in defining the presentation of their brand, so don’t expect to have a dedicated region to work unless the franchisor expressly promises it.
Before considering a resale franchise, thoroughly research the investment requirements as well as the obligations you and your prospective franchisor would assume if you move forwards. Most investors want a company that has a strong commitment to franchisees that includes training and marketing support.
Other Important Factors
Buying a franchise involves more than finding an affordable opportunity with acceptable terms. The Small Business Administration advises prospective franchise owners to consider carefully the amount of money they can afford to invest or lose. Putting too much money into a franchise can cause hardship if you encounter emergency circumstances that require cash on hand to management. No business has guaranteed success, so you should consider how well you could survive if your company or brand goes bust.
Rules and Regulations
Federal and state rules might affect your purchase of a resale franchise business. The U.S. Government, for an example, requires the franchisor to furnish disclosure documents to prospective investors. California operates a Franchise Tax Board that has a guide for people who want to open a business in that state. Your state might have differing rules, so contact the office of your Secretary of State to learn more.