Explaining Franchise Investment to Investors

by: Micha BoettigerWed, Jan 13, 2016

Buying a franchise is a big investment, and a big entrepreneurial risk. Being smart about taking advantage of a franchising opportunity can have amazing benefits, but since a lot of franchising business advertise their franchise opportunities aggressively (because it grows their business), franchising can look a little too good to be true to some investors. In the end, securing your success in a franchise is all about you and how you work, and an honest marketer can make that clear from the start. Let's take a look at some advice from Blocks Pizza, a client of ours who offers pizza franchises.

Having your investment fail is not something that most business owners can easily deal with, so it’s important to do your homework and go in with a plan. Here are a few important things to make sure you’ve got going for you before you set yourself up with your own franchise.



Know Your Industry

A lot of inexperienced investors take their hard-earned money and buy up a pizza franchise, an embroidery shop, or a retail store, basically picking any industry that “sounds nice” in hopes of becoming a successful entrepreneur. Unfortunately it’s just not that simple. Every industry is different, and you’ll need special training (or existing experience) in that industry before you have a real shot at successfully running your new business.



Know Your Parent Company

Always do your research about your parent company before you open up shop at your new franchise. Different companies take very different approaches to training and supporting their franchise owners, and it’s extremely important to align their policies with your needs before you commit to your investment.



Don’t Sink Your Life Savings

A lot of the franchise opportunities you can find online and in the papers for franchise opportunities have explicit net worth requirements for people interested in purchasing a franchise. This is because launching a business is expensive, and it can often take years before a new franchise can begin turning a profit, even if you're selling the best pizza in Miami. To make that happen, you’ll need to be able to support yourself and your business for an extended period of time even if business is slow.



Be Committed

When you’ve made sure that you’re properly prepared, it’s time to really commit and make it happen. Turning your franchise opportunity into a franchise success is going to take a lot of work. Once you’ve set out on your path the time to second guess yourself is over, and it’s time to push forward.

If you take the time to become a fully educated and capable business owner and your franchise will become a huge success!

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