What to Know About Buying a Franchise

Getting the rights to a franchise business can be tough. But, as I've learned talking to franchisees, it's really just the beginning -- there's a lot to learn, especially if it's your first time operating a business on your own.

We spoke to Matthew Marcom, a Territory Development manager and franchisee of Pelican's Snoballs about the advice he'd give to someone who's just secured their first franchise agreement.

1. Start a List

This should be less a business thing and more a personal discipline thing but I think the running to-do list is a life saver, especially in owner-operated businesses. I keep errands, missed communications, and things I need to buy on mine and that keeps me running smoothly. This not only helps you keep your business running but can help build your reputation as reliable when you don't forget to send that quote or return that call because you saw it on your list! Take full advantage of technology too with reminders and lists synchronized across all of your devices.

2. Make Existing Franchise Store Callbacks

You likely made some calls to existing store owners or folks already in a franchise during your discovery process to see if the business or franchise model was right for you. Call those same people back, or at least the ones you may have connected with. Ask them more specific questions now that you have been bathed in paperwork and are "on the inside" now. In many cases, you'll find the wealth of knowledge flows much more freely once you are part of the team.

3. Nail Down the Infrastructure Items Early

I've come across many first-time franchise buyers who are also first-time business owners. In many cases, they handle business needs as they pop up, given they already have so much to do. Try and be proactive in anticipating what you'll need behind the scenes of your business. A good example would be a bookkeeping person or tool; you could hire a CPA or try to learn QuickBooks and do it yourself. You'll also need an HR tool to help with hiring and scheduling; we use Homebase and have found it to be a diverse tool for our needs. Some folks don't think to have a good lawyer in their contacts or a payroll company ready in the wings. These positions will inevitably change hands as you try each choice on but planning ahead instead of as you need them gives you time to pick the best fit for long-term success.

4. Keep the Upfit Slim

When up-fitting a space for a new franchise, try to meet the branding requirements of the franchise in a modest way. You can use less expensive finishes or build-outs that still please the franchise concept without spending that extra money. This will keep your overhead lower, pay-off date closer, and your long-term success more likely. Zero in on the core needs of the franchise and the target customer and that will keep you from getting carried away in the extra $ items you may or may not be able to afford or need.