08/17/17

Thinking About Buying a Franchise? 3 Questions to Answer Before You Leap

We’ve all fantasized about what it would be like to say “I quit” to the old 9 to 5. Entrepreneurship, a.k.a. the new American dream, offers freedom, excitement, and wealth to those willing to dream big enough: be your own boss, set your own hours, make more money, and fulfill your true passion. But creating and owning your own business requires a special mindset and skillset, and not everyone is cut out for it.

Franchising: Is it Just a Job?

The concept of franchising seems simple enough. Jump straight into running a business without having to start from scratch; there’s a developed business model, brand, products, and services all in place to lead off.

Even though franchising doesn’t mean owning a business, franchisees are still very much invested. When you run a franchise, you give your passion, discipline, and commitment, as well as your own money to this business’s success. You’re responsible for successfully managing everything from cash flow to stock, and for executing everything from the customer service strategy to the marketing strategy. It’s not buying a job; it’s cultivating a business.

According to statistics from the U.S. Department of Commerce, franchises account for half of U.S. retail sales and franchise businesses continue to grow faster than the rest of the U.S. economy. Lendio has recently ventured into the growing franchise world, offering Lendio Franchises that help small business owners find the loan they need to grow their business by leveraging Lendio’s business loan marketplace.

Is Franchising for Me?

While franchising success stories abound, hundreds of franchises still fail every year. The most common pitfalls include lack of customer service skills, failure to stick to a business plan, and insufficient funding. Before you submerge fully into franchisement, perform a critical analysis of your own qualifications and limitations. You’ll make a successful franchisee if:

A franchisor may decide at the end of your contract to change the terms of your agreement or not renew the license at all; it’s crucial to do a thorough investigation of the franchisor before you enter into an agreement.

Have I Done My Homework?

If you’re eager to dive into the small business sector and hit the ground running, franchising could be your cup of tea. Enjoy the security of an established brand name while you gain valuable knowledge and confidence that will propel you forward in your own entrepreneurial pursuits—whether that means adding more franchises, branching off to build your own startup or taking over an existing business.

It takes a little cash to change the world.

So what are you waiting for?

About the author

Melanie King
A storyteller since first grade, Melanie King has shaped a career around writing engaging narratives—though her illustrations haven’t improved much since age 6. As a reporter and editor, Melanie has written about everything from retail and tourism trends to economic development for regional newspapers, trade publications, and national magazines. As Lendio’s Director of Public Relations, she specializes in reporting fintech industry news and its impact on American small businesses. Melanie has a B.A. in Journalism from Brigham Young University. She is also a backpacker, runner, and mom of four.

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