Have you always dreamed of becoming a business owner, but aren’t sure where to start? Purchasing a franchise can be a great way own your own business, and far less risky than starting a business on your own. We’ll be bringing you information on 5 tips for buying a franchise.
Tip #1: Do Your Research!
First and foremost, ensure that you’re purchasing a franchise whose company mission and goals align with yours. If you’re an animal lover, a pet resort and spa franchise like All American Pet Resorts could be the perfect option for you! Additionally, you’ll want to make sure that you are familiar with the important details about the franchise company, litigation and bankruptcy history, as well as your initial fees, investment, and obligations. All of this information can be found in the Franchise Disclosure Document, or FDD. If you have any questions about anything you discover about the franchise company, make sure that those questions are properly addressed before you sign or commit to anything.
One of your best resources in navigating this process will be the existing franchisees. Make sure that you secure their contact information and ask for their honest answers to questions like, “If you could start all over, would you purchase this franchise again?” If the franchisor is hesitant to provide you with the contact information of established franchisees, that should be an immediate red flag!
Tip #2: Location, Location, Location!
When it comes to starting a business, location is everything. Your franchise company will likely have some helpful information and statistics to assist you in deciding on the best place to start your business, but ultimately the decision is yours to make. Consider your target demographic when selecting areas to begin your search for the perfect space. Consider details like traffic patterns, parking, nearby stores, and check with the franchisor if you’ll be guaranteed protected territory, meaning that no other franchisee will be able to open shop within a certain distance from yours.
It also never hurts to ask local friends and family what areas of town they enjoy spending time in. Talk to them about what they consider to be good neighborhoods, and where they find themselves gravitating towards when running errands, going out to dinner, etc.
Tip #3: Focus on Service
As a franchise owner, you have the benefit of learning from other successful franchisees to see how best to market and run your business. While this guidance will prove to be insurmountable, it’s still your responsibility to define and manage your customers’ experience.
As you are well aware from your own customer service experiences, both positive and negative, the way a business treats its customers can really make or break the company. Great customer service all starts with the right team members, so ensure that you hire friendly, customer-centric staff to help you run the day-to-day operations of your business. If you’re lacking management experience, make sure that you hire a professional and experienced manager to help run your team and office, or take steps to receive the proper training to be able to do so yourself.
Tip #4: Consult the Professionals
The tax rules and contracts specific to franchises can be difficult to understand, no matter how business savvy you are. It’s a good idea to consult a franchise law attorney who can review your franchise agreement and make you aware of anything within the documents that they feel will not be beneficial to you in the long run.
Additionally, an accountant may be able to better explain the costs associated with purchasing and operating your business over the course of several years, as well as take a closer look at the tax considerations of your investment. Given the magnitude of the investment you are making, you want to make sure that the agreement you are entering into with your franchise company is one that is mutually beneficial and will not come back to harm you or your personal assets.
Tip #5: Determine a Formal Business Structure
Depending on the route you decide to take, and the specifications laid out by your franchise company, the structure you select for your business can affect tax treatment as it pertains to your business and personal taxes. Defining a formal business structure is an important part of separating your personal assets from your business, and while it can be complicated to make these kinds of decisions, doing so will better serve you as an individual and business owner over time.
We hope that you’ve enjoyed our 5 tips for buying a franchise! Feel free to contact our corporate office for more information on purchasing your own All American Pet Resorts franchise!