Elements of an Ideal Franchise

The ideal franchise will have a strong financial track record.profit/loss image by Warren Millar from Fotolia.com

Entrepreneurs who don't want to go it alone and reinvent the wheel may be interested in franchise ownership as a practical means of owning their own business. The benefit of owning a franchise is that you get to operate your own business, but the systems of operation are already in place. In addition, the small business owner gets the added leverage of owning part of a largely recognized brand name. Choosing the best franchise for your personality, location and budget takes a lot of work but is necessary for the success of your business.

Prompt Communication

If you are investigating a company to see if they may be a potential good match for you, be sure they answer all of your questions promptly and completely. It's not a good sign to potential franchise owners to experience slow or poor communication from the parent company.

A good franchise company offers their franchisees training on how to operate the actual business, including payroll, attracting new employees and general ongoing business training.

Any reputable franchise company will allow you and your accountant to review their official financial statements to determine if the business is a good risk and likely to offer a proper return on your investment.

Check with the Better Business Bureau in different areas where your potential franchise exists. Any large business is likely to have a few complaints, but make sure there isn't a pattern of complaints against the business. Observe if people repeatedly complain about the products and services that the franchise offers. If so, this may be a potential red flag.

Whether you are looking to purchase an existing franchise or having a new one built, the location should have a large population of people who are willing and able to purchase the product or service that the franchise offers. Demographic information takes into account such things as the age range, occupation, spending habits and size of the surrounding population.

If there are specific franchises you are considering, interview their owners to see how they enjoy running their business. If they are happy and successful, that is a good sign that they are receiving the proper support, systems and training from the corporate office. Check to see how long each particular owner has been in business. Find out if there is a lot of franchisee turnover or if the owners hold onto their business for the long haul.