Jumping into business ownership on your own is a huge step. Moving from a known and stable path to one full of unknowns can be equal parts thrilling and nerve-wracking. Taking that bold step into franchise ownership will stir up a mix of feelings, but remember, this big decision is just the starting line on your new adventure.

Next up? Figuring out exactly what kind of business sparks your interest enough to invest in. The trick is to find something that not only clicks with you but also clicks with the market. Before you put pen to paper and sign anything, make sure to consider these seven crucial aspects.

Customer Acquisition Strategy

Sure, it might seem obvious, but that's why it's so critical to ask: How do I get customers? Customers are the engine of your business, so having a solid game plan for attracting them can ward off mishaps before they happen.

Talk with the franchisor about their current marketing and customer acquisition programs and have discussions with current franchisees.  How did they grow their business?  What worked vs. didn't? Understanding this is key to running the business and sustaining a healthy growth trajectory.

Customer Service Methodology

Acquiring customers is great, but can you provide the product or service they need?  Let’s say the franchise is an HVAC repair business.  Who will be doing the repairs? Will it be you, or will you need to hire someone? This is also a good spot to think about market fit. Is this a need vs a want service? If the next few years look anything like this current labor market, the service portion might be one of the most important.

Understanding the Unit Economics 

It's safe to say unit economics are often considered the foundational building blocks of the business. Knowing what it costs to bring in a customer and how much you'll make from them is vital to keeping your business alive and well over time. It is also important to understand the fixed costs of doing business, any minimum monthly royalties, advertising fees (both national and local), technology fees etc.. Knowing these details enables you to make a well-informed, fact-based, data-driven decision. 

Your Role vs the Role of Successful Franchisees

We've touched on this previously in the question regarding customers service, but this challenges you to get a defined description of what your role is as a franchise owner.  Is the model owner/operator?  Will you hire someone to run the business, while you oversee the operation?  If you are not someone who wants to be in the trenches, it is important to get a full understanding of what you will be getting into. If you can’t see yourself in the shoes of the most successful owners, then the model might not actually be the right fit for you. Make sure you know what you are signing up for.

Identifying Your Franchisor as Your Partner

Here, we are not talking about the partner you might invest in the business with – we are talking about the franchisor.  In a great franchise system, you should be able to go into business for yourself, but never feel like you are by yourself.  Get to know the franchisor and determine if this is a partnership you see working with for the long haul.

What is the Brand's Value Proposition?

A brand's value proposition gives detailed reasons why a product or service is right for a particular market.  If you enter this business, are you fully committed to honoring the brand's promise to its customers?  Is it a commitment you feel like you could make?  It's one thing to sell a product or service but investing in it requires an actual buy-in of the brand and service outside of your financial commitment.

Can You See Yourself Doing This?

Franchise contracts are long-term commitments.  They are not something you should enter into lightly.  The basic litmus test of, “How does the thought of this make me feel?” might make all the difference in whether or not this is the brand for you.

Information is Your Friend When it Comes to Business Ownership

Taking the leap into franchise ownership is a massive, life-changing decision needing plenty of thought. Understanding how to navigate the process and asking the appropriate questions can make all the difference in choosing the franchise model that aligns with your future goals. At Evergreen Franchise Advisors, we don’t believe anyone should have to go at this process alone.  Our data-driven, individualized approach, is aimed to share franchise opportunities aligning with your entrepreneurial style.