You’ve had your fill of bosses. You’re determined to start your own business, though you see plenty of obstacles ahead. You don’t have a lot of investment capital. You’ve never run a company of your own before. Where do you learn the day-to-day decisions you’ll have to make? How will you find customers? You’re not even sure where to start planning.
Have you ever thought about buying a franchise business?
Start by asking the right questions and getting answers you understand. Once you know the kind of business you’d like to run, simply reach out to a franchise representative. It’s easy to find contact information online.
Once you’ve introduced yourself, here are some of the key questions to ask before buying a franchise.
How Much Independence Will I Have?
You’re through with bosses — remember? You want to be on your own. Maybe with one of the easy companies to open as a first-time business owner. That’s one of the most important reasons you’re considering the franchise model in the first place.
As a franchisee, you will have bought your own business. The company is yours. But in adding an already established logo, branding, and way of doing business, you’ve also added a built-in customer base. That’s the advantage of this model.
Consider this: If you owned a fast food franchise in New Orleans, you might have Indianapolis tourists stopping in because your eatery carries a name, look, menu, and other details that are already familiar to them. They’re 800 miles from home, and they’ve never even been in your state before, but the Indianapolis visitors know your business and feel very comfortable patronizing it.
Contrast this with a situation in which you start a burger joint with our own name and a self-designed logo. Do you think those out-of-towners would stop in? They’d know nothing about the quality or cost of your menu and might consider it too big a risk to try the unknown.
Your franchisor’s representative should be able to answer all your questions related to the policies and procedures you’ll be expected to follow in order to meet your customers’ expectations and maximize your profit potential.
But the day-to-day decisions are yours to make. The business is truly yours.
Can I Talk With Other Franchise Owners?
Here’s a red flag: The franchisor won’t give you contact information for other franchisees and doesn’t want you to seek them out.
If the rep tells you that you could expect to make a shockingly high annual income, is that fairly typical, or does it happen about as frequently as Halley’s Comet is visible in the night sky? The only way you’ll know is by asking around.
Don’t just rely on the names your rep gives you, either. That might be the cream of the crop, the “Halley’s Comet” level of franchisees.
Call up random franchisees. Strike up a conversation. Ask them how many hours a week they put into the business. What their main challenges and obstacles are. Ask about the brand’s reputation with its customer base. Would they join that franchisor again if they could hit the reset button on life?
These are just some of the critical franchising questions to ask to get honest, in-the-trenches answers.
What Will My Franchise Cost?
Now, there’s an important question to get into from the get-go. Your rep will set your franchise fee at a few thousand dollars.
Or several million.
Or somewhere in between.
Yes, that’s pretty widespread. But that’s because you have so delightfully many options when it comes to choosing a franchise to purchase. If you must lease and remodel — or even build from the ground up — a restaurant, hotel, or other building, that cost will be reflected in your franchise fee. So will the gear, equipment, inventory, and other must-haves of your operation.
You’ll also pay licensing fees for the branded products or services you’ll sell. That tends to be charged as a percentage of your revenue or profits. It works in different ways for different franchise operations.
Then, there are the miscellaneous charges that every business must undertake. That’s everything from the cost of utilities to the various taxes you’ll pay. And if you must have 100 full-time and part-time employees before your grand opening, don’t forget to put that in your budget.
At the other end of the cost spectrum are the solo franchise ventures with low overhead. Consider running a commercial window washing operation or an insurance company.
Take a closer look. If you become a franchisee of an established, highly reputable insurance company, you might not need much more than business cards, a cell phone, a laptop, and your kitchen table to start. You’ll already own a familiar name with prospective policyholders. As your business grows, you can add employees and move into larger and more impressive quarters.
The point is that these companies come in all sizes, structures, and complexities, and at all entry cost levels. So, how much does a franchise cost? You’ll only get all the details by knowing the right questions to ask franchise owners.
Can I Get It in Writing?
Of course you can. It’s the law. Every franchise operation has what’s known as a franchise disclosure document. Your FDD includes all details, including your startup and ongoing costs, the policies and procedures that should be followed, and the expectations of the company and brand.
Take your FDD to your lawyer and accountant for their review. You want to feel confident that the opportunity makes financial and business sense. If you still have questions or doubts, share them with your franchise rep. Only sign legal documents when all questions have been answered to your satisfaction and doubts have been erased.
At Freeway Insurance, You Can Ask Us Anything
We are actively offering opportunities all over the nation. We welcome all franchise questions and vow to provide clear-cut answers.
At Freeway Insurance, we’ve long established productive relationships with major insurance carriers — the brands your customers already know and trust. In that way, we’ve built an impressive inventory of insurance products for you to offer. That’s how we’ve become one of the nation’s largest and most respected personal lines insurance companies.
We’ll make sure you get top-tier training — including the certifications specific to your state — ongoing support, and the guidance you need when you feel that you need it.
Let us show you, in detail, how to attain a financially rewarding Freeway Insurance franchise.
Call Freeway Insurance at (877) 822-3024 and chat with a Freeway Insurance franchise rep today.
Ask us anything.
