Spreading your entrepreneurial wings through the purchase of a franchise is a BIG deal. Don’t let anyone tell you otherwise. Potential franchisees who are considering spending their hard-earned savings should have some hesitation before “signing on the dotted line.” And, not every franchise is right for every franchisee and vice versa. It truly needs to be a good fit from both sides. So, with that said, here are four very important questions (and answers) that should be posed and pondered before jumping into the franchise world.
What is a FDD (Franchise Disclosure Document)?
If you are serious about a particular franchise opportunity, you will be given a copy of the franchisor’s Franchise Disclosure Document (FDD). It contains 23 items such as: background information on the company and its executives, a list of costs associated with the franchise, rights and responsibilities of both parties, financial information, a list of all franchisees and a copy of the current franchise agreement. The Federal Trade Commission (FTC) mandates that franchisors provide the FDD to all prospective franchisees prior to signing the Franchise Agreement. This document is an integral part in the franchise selection process, as it discloses everything about the company, both good and bad.
How much money can I make with a franchise?
This is a difficult question to answer. Good franchise systems are providing you a proven operating model. The prosperity with any good franchise system depends on how well you as the franchise owner can execute within the system. All franchisees are given the same tools, resources and education, but it is the drive, determination and execution that separate the top performing franchise owners from the rest of the group.
Should I feel comfortable with the franchisor?
Most definitely! When you invest in a franchise, you’re in for the long haul, so you’d better be able to work with your franchisor. Make sure to visit the company’s home office, even if it’s in a different state. And ask other franchisees about their experiences with the franchisor. Remember that this is essentially a business partnership. Do your due diligence beforehand to make sure you and the franchisor will make a good match.
What are the main reasons why a franchise might fail?
In our years of experience in franchising the two main reasons for a lack of growth are under capitalization and poor execution. You want to ensure that you have enough reserves to sustain the business until it reaches profitability. You also want to consider how much you will need for your own living expenses while you are building your business. With a franchise you are investing in a proven model, so make sure you understand the model and how to execute within the system.
Please keep in mind that the above questions are only four of many that you may want and need to ask a franchisor. Remember, a good franchisor will take the time to listen and answer all of your questions, as well as address any concerns.
You can be assured that FirstLight Home Care will provide you with all of the information you need in order to make an informed decision regarding your potential ownership in our franchise. When you combine business ownership with a well-known brand name like FirstLight Homecare, experience and an established foundation, franchisees and franchisors form a unique, mutually beneficial business relationship.
For more information, visit us at www.firstlightfranchise.com or call us at (877) 570-0002.