Selecting a franchise opportunity can be the most important business decision of your life. On top of that, at any given point, there are over 3,000 franchise opportunities being offered for sale (although only about half that amount are registered and available for sale in the Commonwealth of Virginia). There are many issues to consider and questions to ask before making a final decision, but one fundamental question to ask is whether you are convinced the business concept represents a sustainable business model versus a short term fad that will fizzle out within a few years. Answering this question correctly is the difference between business success and failure.
Examples of fad concepts that have come and gone over the past twenty years include frozen yogurt and home meal preparation (remember Dream Dinners, My Girlfriend’s Kitchen, and Meal Makers?), among many others. Look around town at successful concepts that have been around for 10+ years with dozens, if not hundreds, of company-owned and franchised locations around the country and that gives you a decent hint that those business models are sustainable. Do new franchise concepts have potential for great success (i.e., the next McDonalds)? Sure, but new franchised concepts also come with great risk and the point of buying a franchise is to reduce the risk that you’d otherwise encounter as a startup business owner. Consider whether the franchise appeals to a broad audience and would fill an unmet need in your market. Consider how many other companies sell a similar product or service in your area and how the franchise opportunity you are considering is unique. Ultimately, it is important to do your homework, get help as you go, budget conservatively, and do everything you can to put yourself in a position to make an informed decision before investing tens of thousands of dollars in a franchise opportunity.
We are pleased to offer a flat fee franchise document review package to help prospective franchisees navigate the process, so if you are considering investing in a franchise opportunity, contact us today!