Learn something new every day
More Info... by email
One of the most popular types of business investments is starting a franchise. If you want to become a franchise entrepreneur, you will need to be a diligent researcher and a smart businessman. There literally are hundreds of franchising options, from businesses in the food industry to retail businesses to those that provide services, and you must choose the best fit for your financial situation and market.
A franchise primarily is a licensing agreement between an individual and a parent company. For a fee, the entrepreneur is able to use the company's business model, logo and products in order to open their own business. Restaurant chains are a great example, because each store can be independently owned by a franchisee who bought the rights to open a restaurant in the chain.
There are no educational requirements if you want to become a franchise entrepreneur, but many entrepreneurs have extensive school backgrounds. The most common education would be, at minimum, a bachelor's degree in business. These classes teach you about economics, accounting, marketing and employee management. If you have a background in the industry in which you want to have a franchise, this can be just as good as education. For example, if you have years of retail experience and want to own a retail franchise, you will have a strong understanding of how the business works without having learned it in the classroom.
Market research is an important aspect of being a franchise entrepreneur because it directly ties into your business' success. Knowing what type of companies succeed, where there is a saturation of businesses and where a real need exists will help you choose a franchise type and location. This involves reviewing financial documents, newspaper articles and marketing reports for the area and industry in question.
Financing is an equally important part of being a franchise entrepreneur. Most parent companies charge large sums of money for the right to use a business model. In addition, you will need to pay for real estate, construction and supplies and to hire employees before you ever open the door to a customer. You will need to seek out individual investors, acquire bank loans, use personal assets or a combination of the three to acquire enough capital to begin.
As a franchise entrepreneur, you also must handle the business after the franchise opens. You must manage employees, review the accounting books and make changes to become more profitable. Successfully handling these aspects will give you a lot of freedom to buy a franchise. From a fast food franchise to a car sales franchise to a golf equipment franchise and more, you will be able to jump into practically any industry.
One of our editors will review your suggestion and make changes if warranted. Note that depending on the number of suggestions we receive, this can take anywhere from a few hours to a few days. Thank you for helping to improve wiseGEEK!