Choosing the Right Franchise for You: Expert Tips to Refine Your Search
September 7, 2022
Investing in a franchise is a life-changing decision. But choosing the right franchise to explore is a time-consuming task. There are thousands of opportunities available across a wide range of industries—from fitness and fast food to home and child-related services. To focus your search, it’s helpful to think deeply about your interests, lifestyle, and other preferences. The answers will help to narrow your choices and place you on the shortest path to franchise ownership.
You should be interested in the franchise you’re considering—whether it’s the product or service, or industry. You want to explore businesses that immediately grab your attention. But we encourage you to keep an open mind. A franchise concept may seem boring on the surface but surprise you with something unique and unexpected.
Plus, consumers can tell if you genuinely care about what you’re selling, or if you’re just trying to make a quick buck. It’s probably not the right business for you if you don’t believe in the product or service. In the end, you’re more likely to achieve long-term happiness and success if you’re interested in and passionate about the business.
Home-Based vs. Brick-and-Mortar Franchise Models
Franchise concepts exist in every format imaginable. One of the biggest questions you’ll need to answer is where you want to operate the business from. Will you work from home or set up an office, storefront, or another brick-and-mortar establishment?
Home-based businesses are a great option for those seeking lower startup costs. Operating your business from home removes the financial burden of building a facility or signing a lease, as well as purchasing office furniture and other equipment. You can use the space you already have to generate income from the comfort of your home.
Brick-and-mortar businesses are a great option for those who prefer a dedicated workspace and feed off of others’ social energy. Plus, you get a professional storefront with room to grow. More often than not, brick-and-mortar establishments provide more space than you have available at home. This can empower you to expand more easily as your business grows.
Owner/Operator vs. Manager-Led Franchise Models
There are three different business models for franchise ownership: owner/operator, semi-absentee ownership, and absentee ownership. Be sure to know your preferences to focus on the concepts that align with your goals and lifestyle.
The owner/operator franchise model is the most common and requires you to be involved in all aspects of the business. As the name implies, you are engaged in the day-to-day operations, with a focus on managing and growing the business. It’s a great fit for first-time franchise owners or anyone who’s making a career change and wants to remain hands-on. With the help and support of the franchisor, you’ll confidently guide your team to success as you build a rewarding career with a financial upside.
The semi-absentee franchise model is manager-led, although you must still frequently be involved with the business and provide direction. This allows you to oversee the decisions being made, with plenty of free time to support your family or look into other job opportunities. Once it’s up and running, semi-absentee owners typically spend about 10-15 hours per week on the business.
However, issues arise when people try to run an owner/operator franchise in a semi-absentee capacity. Most franchisors set the expectation upfront, and it’s important to understand if you can operate the franchise on a part-time basis.
The absentee ownership model requires the least amount of direct management. With help from the franchisor, you implement a management team to handle the daily operations. The labor costs are the highest, but it allows you to own a franchise while focusing your time and energy elsewhere. However, there aren’t many franchise opportunities that can run successfully without your direct involvement.
Single-Unit vs. Multi-Unit Franchise Ownership
There are two types of franchise owners: single-unit and multi-unit. Your role will differ depending on the type you choose, so it’s important to understand the differences and how they align with your comfortability and goals.
A single-unit franchise grants the franchise owner the right to operate just one location. First-time franchise owners find single-unit franchising appealing since it requires a lower initial investment and an owner-operator role. This can be especially helpful as you become comfortable as an entrepreneur and learn the ins and outs of the business. In most cases, you can purchase additional locations when you’re ready to expand without the initial pressure to grow beyond one location.
A multi-unit franchise grants the franchise owner permission to operate multiple locations, often in the same area or region. Multi-unit operators are often semi-absentee owners, who focus more on expansion than day-to-day operations. Experienced entrepreneurs with larger investment budgets find multi-unit franchising appealing since there is a greater potential for growth and revenue. You are assuming greater risk, but if done strategically and correctly, you will see a greater reward.
If you’re open to all scenarios, great. If not, be sure to adjust your list of criteria accordingly.
- Choosing the right franchise to explore is a time-consuming task. To focus your search, think deeply about your interests, lifestyle, and other preferences.
- You are more likely to achieve long-term happiness and success if you’re interested in and passionate about the franchise—whether it’s the product or service, or the industry.
- Franchise concepts exist in both home-based and brick-and-mortar models, each with its own set of pros and cons. It’s important to understand which you prefer.
- There are three different business models for franchise ownership: owner/operator, semi-absentee ownership, and absentee ownership. You should choose a franchise that aligns with your goals and lifestyle.
- There are two types of franchise owners: single-unit and multi-unit. You should choose a franchise based on your investment level and entrepreneurial experience.