Careful research with a proper investigation is the best formula before driving into any decisions. And to ask questions is a necessary element to make it successful. So, here are the five questions to ask before buying a multi-unit franchise opportunity.
But before we get started, let’s first answer, what multi-unit franchising is. It is the skeleton of your research.
What is Multi-Unit Franchise Business?
One is not enough for a successful franchisee. If a franchisor allows you to expand to more units, you are now a multi-unit franchise owner.
Clearly, multi-unit franchising means that the franchisee will have an exclusive right to own and operate more than one franchise unit in a single territory. And this will open to more opportunities, such as more units, more consumers higher franchise return on investment.
Indeed, it is the step higher to a successful franchising career. Your success in this means a fruitful partnership between you and the franchisor.
Feels great! However, before you jump to the conclusion of adding more units, you have to run an investigation. And to make it successful, you need to ask these five questions first.
5 Questions to Ask Before Investing in a Multi-Unit Franchise Business
Entrepreneurship is hot! Just go to any Multi-Unit Franchise Expo. The aisles are crowded with potential multi-unit franchisees. More and more people want to be self-employed; preferably sitting at home and earning passive income.
Being your own boss and having flexibility in your schedule are two of the many benefits that multi-unit franchise entrepreneurs enjoy. If you wish to become a franchise owner, you need to like being your own boss.
Sounds good, right? Before you “take the leap” you must ask yourself the following 5 questions:
When you are on your way to kick-start your own company, do not scurry into any hasty decision. Meticulously chalk out your vision, mission, and philosophy of your business. This will be the stepping stone to the success of your commercial undertaking.
What can you do? Create a strategy about how you want to achieve your goals and hire quality people who can help you to attain these goals. Make a realistic plan, make it your guide, and work on it.
Check out what an effective plan looks like.
A plan is an outline for business success. Without proper planning, it will be difficult for you to run the business along the way. Sketch how you are going to start a plan and make it real.
This is an important step to visualize what your multi-unit franchise will look like. It will also help you determine if you have the capabilities of running the business even before starting.
2. Do You Have Access to Enough Capital?
This is such an on-point question but it truly makes sense. Being well-capitalized is so important in starting a business. Everything tends to be ten times harder than you expected and you need a cushion to deal with the unexpected.
If you don’t have enough money set aside to deal with adversity, you are setting your future as a franchisee up for failure. And we do not want to make that happen. Who can help you?
Perhaps you need a financial partner in multi-unit franchising. It can be someone you know or through a bank financial loan. Is it needed?
Most franchisees tend to rely on financial assistance offered by top lenders or banks across the US. It doesn’t make them financially stable but the purpose is to supply the needs of the business and make it sustainable.
Since multi-unit franchising is a larger business opportunity, you have to make sure that your total investment can suffice the cost of putting it up. Make wise decisions before making a move. One wrong mistake can be hard to fix.
Enough capital will be an assurance that you can fund a bigger business. Besides, multi-unit franchising can produce higher profitable returns than single-unit franchising.
3. Is Your Family on Board?
Is your spouse really on board with this decision? This is an important factor to consider. Without the support of your loved ones, you can’t become a successful multi-unit franchisee. Everyone should know.
Make sure that they are ready to accept the challenges that will come your way. Let them know the possibilities such as:
Everyone needs to cooperate. Avoid conflicts and arguments which will not help in growing a business. In multi-unit franchising, organized teamwork is the secret building block.
It may not be easy to manage more than one business and handle those all at the same time. But with the help of your family, you can make it.
There is no easy start. So before starting your journey in multi-unit franchising, make your family understand how hard it may be from the beginning. When you are successful, all the sacrifices will be worth it!
4. Have You Chosen The Right Location(s)?
In Real Estate, they say that the three most important things are location, location, and location. Location plays a great role in determining the success of your business. A wrong location can jeopardize your franchise investment.
On the other hand, a great real estate decision is a critical component for success in your new venture. Choose your franchise unit location(s) wisely. Talk to industry experts and the franchisor. Their assistance will help you find a perfect area.
To give you further ideas, consider at least five components of a perfect location:
The location has a huge impact on your marketing strategies, brand advertisements, and returns. Make sure that you take time in choosing the right location in each of your multi-unit franchises. Don’t forget to ask for help if needed.
5. How Committed are You to Becoming a Franchisee?
Grant Cardone says “you need to find new problems.” Whenever someone starts something new, there are always naysayers. You will probably face “haters” who will try to demotivate you.
Do not let these negative remarks get the better of you. If you are committed to becoming a multi-unit franchisee, you should have a strong perception that you can make the business grow.
Are you committed throughout your franchising career? Try to do this simple self-examination to check the level of your commitment:
Your 100% commitment is vital in running a business successfully. It may ask more than of your time and sacrifices if you start a multi-unit franchise. Make sure that your commitment is consistent. Prepare yourself to engage more in the business.
Considering those five questions are beneficial before signing any multi-unit franchise business contract. And answering them will guide you on the following:
• How to start
• When you should take it
• What to expect
Adding more units is not that easy to start. But once you get the hang out of it, success will follow. If the multi-unit franchise is part of your plan, speaking with a business consultant will help you have a strong understanding.