Franchises businesses are growing rapidly with 400,000 firms employing 10 billion people
Owning a franchise is like being a business owner without all of the associated risks. Franchise owners enjoy the benefits of a proven business model as well as operational and marketing guidance. Some are eligible for special financing.
Franchise ownership is no easy shortcut to success, however. As with any small business, the workload and financial commitment can be considerable.
According to the International Franchise Association (IFA), franchised businesses are growing at a rapid pace. Some 400,000 such firms now employ nearly 10 million people and have a collective payroll of $230 billion. Theres always a hot new franchise on the scene. Curves, for example, a network of franchised women-only fitness centers, recently grew nearly 38 percent in a single year, with nearly 10,000 sites now worldwide.
As you research franchises, ask about the required experience, if any, as well as the expected hours and personal commitment necessary to run the business. You should also learn about the franchisor’s background. For example, what is the company’s track record and how are its franchisees doing? The up front cost of buying the franchise is crucial, of course, but you should also find out how much you’ll pay for the continuing right to operate the business and what products or services you’ll be required to buy from the franchisor.
The “Franchising Basics” section of IFA’s website, www.franchise.org, offers extensive information on how franchising works, online discussion forums that cater to prospective owners, and a searchable database of more than 1,200 franchise opportunities.
And, don’t forget about financing. If you’re considering applying for a loan backed by the U.S. Small Business Administration (SBA), visit the SBA’s Franchise Registry. This service lists names of franchise companies whose franchisees enjoy the benefits of a streamlined review process for SBA loan applications. A faster review means better, faster service, enabling you to get your franchise off the ground sooner. Even if the franchisor is not a Franchise Registry participant, your loan application will be reviewed individually by the SBA or its lenders. As with any application for credit, make sure to comply with all documentation requirements.
To learn more about starting a franchise, call 1-800/634-0245 for the SCORE office near you or visit www.score.org.