Buying a franchise? Learn how to evaluate and analyze your options and alternatives

Congratulations! Looking to become an arena franchise. There are over 1500 options for you to choose from. How does one separate and decide which choice is right for you?

It 's important to first decide the amount of capital available for you new business. Franchises come in all shapes and sizes. There are franchise services, retail products (s) franchise, restaurant franchises, franchising services, car and many others. The amount of capital required also vary greatly.

If you're looking to buy a franchise of Subway as a first level, be prepared to have a large sum of money available. Most high-level franchise is going to require a minimum of $ 50,000 of available cash, plus a stellar financial statement. Some franchises will be upwards of $ 1 million needed. There are franchises available for any level of investment of $ 10k, but it is very likely need at least another $ 10k for equipment, supplies, construction costs, etc.

If you have a maximum of $ 10k available for all the costs listed above, options may be somewhat limited. For those who have $ 25K-$ 50K, the choices available will open up a lot but most likely will still exclude most of the top-level options. For those with $ 150k + available, the choices for the purchase of a franchise will be significantly greater than proven.

In cases where a person can go to find quality information in a non-biased way? There are some websites that you would find beneficial.

This link will give you an overview of things to look for in a franchise and how to evaluate each.

http://www.franchisedoc.com/evaluate.html

The FTC has a nice site with an objective view of what to look for when choosing a franchise. See their website at:

http://www.ftc.gov/bcp/edu/pubs/consumer/invest/inv05.shtm

Be careful of sites that list other franchises available with links to their respective companies. That in itself is not a bad thing, but I know that most of these sites receive a commission for you by clicking and / or purchase of a franchise and lists there will probably be limited to companies that receive this commission and may omit many franchises that you would be interested research and planning should always be exercised in evaluating any business opportunity.

What are the advantages of buying a franchise?

1. You should have a better chance of success.

2. The franchise you are buying is (or should be) already tested on the market.

3. The company will provide support and systems to avoid the errors of a stand-alone business. In essence, the learning curve is greatly reduced.

4. Problem solving. With the company and many other franchise owners in the company, problem solving and better solutions to problems can occur more quickly and efficiently.

5. Management support. You will have access to people who can help with decisions, and marketing problems. Their experience is a part of what you pay for with franchise fees and royalties.

6. Purchasing power of a larger group usually means cheaper costs for the goods your business needs. Ongoing research and introduction of new products are also available for the owner of the franchise by the franchise company.

Let's examine some of the pitfalls / disadvantages of franchising.

1. Excellent products does not automatically transfer into excellent franchise opportunity. Be careful of new franchises. Knowing how long they have been in business and be sure to contact the references of the owners of franchises that offer, but also do some 'vocation of those who own the franchise you are looking to buy from those who do not provide. Google search for specific locations and talk to several owners and get their opinions.

2. A fast growing franchise may or may not be a good thing. The new licenses are expected to grow faster than the older-established franchise. This can be a good sign for future growth and business for you, but you must also be careful that the company has the infrastructure to handle this rapid growth. Here is where you need to ensure that the territory that is received by the company is rock solid. Have your legal counsel to ensure that a year from now the company can not sell a franchise 6 blocks down the road from you. This can kill your business fast!

3. Employees are going to be a significant part of your future. If you've never had someone working for you, to have the switch and the management of employees can be daunting. With employees are other areas of concern. Now you have payroll taxes, workers compensation, benefits, reliability issues and various other challenges. Many new franchise owners report that the only major "headache" in their new business is the management and treatment to employees. Know that you will spend a lot of time dealing with the employees directly or by observing browse and accompanying paperwork that comes with the employees.

4. Do not ever buy a franchise thinking you will have more time or the freedom of your program! This error has cost many new franchisees money and peace of mind. Be prepared to double the amount of hours you are working after the purchase, open and manage your new business.

5. Have a backup plan of income back into place. Many new businesses take time to become profitable. As the new owner of a company, you are the last person to have a "paycheck". The employees, government agencies, vendors, suppliers and your cash reserves in the whole business before you pay. Becoming profitable is certainly easier than opening a franchise with its own stand-alone business, but make sure you have at least 6 months of cash in the bank to live, you should first wait for the new franchise to provide an income for life.

So, the pros and cons of franchise ownership are really what you have to weigh. For some people, working within a rigorous corporate system is difficult. This may be especially true for those real "entrepreneurs" or those who aspire to become an "entrepreneur". For many, there are some excellent alternatives to franchises that are worth considering.

If the above pitfalls outweigh your desire to purchase a franchise, these alternatives can provide the following advantages.

1. Dramatically lower costs to launch and run a franchise that no stock in the course fees.

2. There are no employees to pay taxes on wages, benefits for the head or pain to deal with.

3. The world can be your market. No restrictions regarding where and how you can market your business.

4. Systems tested with some franchise companies chosen few alternatives. Pay attention to "get rich quick" schemes and scams. Do your research for these business opportunities and make sure you find that with a high profit margin.

5. Be wary of M-L-M compensation plans. Although there is nothing inherently wrong with these plans, most people prefer to keep the Commission you earn with their activities for themselves.

For an excellent alternative to low-cost franchise that provides many of the benefits of a franchise with a level of income franchise, check out:

Save money by Franchise Alternative

In summary, there may be many advantages to buying a franchise. If you are in a position finacially and have the time, you can be a great candidate for franchise ownership. Carefully select and use the resources listed in this article. For those who can not invest the necessary capital and can not go without a paycheck for 6 months +, check out the alternative of the above .......