Evaluating a Franchise Business Opportunity
A Home Business Article Contributed by Elizabeth Fox-Wise
What is a Franchise Business Opportunity?
A franchise business opportunity is often referred to as "turn key" or "out of box" business opportunity. Basically, when you purchase a franchise business opportunity you are buying, from a larger parent business, an opportunity to business as they are doing. With your franchise business opportunity, you will typically receive support on how to start and run your business, access to the parent company's marketing materials and methods, access to the parent company's product and, perhaps most importantly, the use of the Parent Company's established name and reputation.
Since the name and reputation are also one of the most valuable aspects of purchasing a franchise business opportunity, the price that you pay for your franchise, will typically be proportionate to the reputation of the company and they length of time they have been in business. Therefore, a more established franchise business opportunity will usually cost more than a franchise opportunity with a newer parent business.
Some Initial Things to Investigate Regarding a Franchise Business Opportunity.
The first few things that you want to do when considering a franchise business opportunity are pretty basic, but must not be overlooked.
The first step of your evaluation should be to make sure the business opportunity you are considering is in compliance with all business opportunity statutes. These statutes will vary from state to state. You also want to make sure that the business is registered in the state that the parent company is housed in.
Next, find out if business opportunity you're considering provides an offering prospectus to potential buyers. It is a good idea to have the prospectus reviewed by your accountant before making a purchase.
Other Things to Consider When Choosing a Franchise Business Opportunity
The first few things have little to do with the franchise business opportunity and more to do with yourself. First, consider your strengths and your interests. Will you be successful doing the type of work that the business opportunity requires? Will you enjoy it and be able to run your franchise business opportunity with passion? Do you have prior knowledge of the product or service you will be selling - and if not, does the franchise parent company provide enough resources for you to get the necessary knowledge? These are important to your success with any franchise business opportunity.
Other things to consider have to do with the market for the product or service you will be offering with a franchise business opportunity. Is there a need in the market? Is the timing right to bring this product or service to the market? How many people are already serving the market?
And still other things to consider are about the franchise parent company. Research the company's history - how long have they been in business and what is their reputation. Do a check with the Better Business Bureau. Have there been any complaints about them? What is the company's profit ratio to sales?
Thoroughly evaluating a franchise business opportunity will greatly increase your chances of making an informed, educated decision that will be a lucrative business match for you.
