by Esther Andrews

Created on: August 03, 2008   Last Updated: July 06, 2010

An introduction to franchise opportunities

Franchises allow you to leap into small business ownership at a relatively low start up cost with myriad additional benefits including an established corporate brand and reputation, extensive training and marketing support, real estate and construction assistance, and above all - less risk you'll lose your shirt. Successful franchises have worked out many of the kinks in their business model so you can profit from the wisdom of their experience. (Think of it as actually listening to your parents and not repeating their mistakes.)

Many people mistakenly assume that the only franchise opportunities are fast food restaurants, yet while many of the top or fastest growing franchises according to Entrepreneur.com 7-Eleven, Subway, Dunkin' Donuts, Pizza Hut, Sonic, KFC - are in the food & beverage industry, there is a wealth of other franchise opportunities to suit your interests and enable you to rapidly transition from employee to business owner.

Are you currently a hairdresser? How about a "Great Clips" hair salon franchise? You're a part-time teacher, or tutor? Why not a "Sylvan Learning Center" franchise? You're a tax preparer? Try a "Jackson Hewitt Tax Service," "Liberty Tax Service" or "Instant Tax Service" franchise. The possibilities are practically endless, with franchises in the business, finance, technical, child care, education, food & beverage, health care, home improvement, personal care, pet care, recreation, retail, automotive, maintenance, and training industries and more.

A common misconception is "I can't afford a franchise" when in fact many people can. While getting into a franchise may cost upwards of $10M to start, particularly hotel franchises, there are a number of franchises that can be started with investments as low as $3k and dozens of opportunities in the $10-$50k range. Even if you don't have enough all the cash for the initial investment, there are financing options available. You may be able to obtain a loan through a bank or credit union be sure you have a business plan, good credit, and a portion of the down payment on the franchise and you're much more likely to be approved. Approach some of the smaller local banks and credit unions that may be more willing to invest in the local economy. For down payments, many franchise owners scrape together money from their savings, home equity, 401k's, inheritances, or friends and family.

To select a franchise, first do your research. Find out which franchises are successful and why. Interview current franchise owners and ask about their satisfaction and dissatisfaction with the franchise. Ask about the type of support the franchise will offer to help make the business a success, e.g., did the franchise's training program effectively prepare them to run their business? Did the franchise provide enough support to help select a location and complete construction? Research how much return on your investment you can realistically expect in order to determine if a franchise has the potential to meet your financial goals. Look into the franchise's legal history to determine the extent of its litigation and look over their financial statements or ask an accountant to review them for you.

Always remember that investing in any business is a risk, but if you've done your homework, a franchise can offer you the opportunity to try on business ownership for size with a little more peace of mind.

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