Is now a good time to buy a franchise?

by Michelle Rowan

Depending on where you are in your research or decision making process, yes- this still is a good time to buy a franchise! There is so much doom and gloom in the papers and on the news- companies laying off, threats of a recession greater than the Great Depression, lack of bank loans and funding, it's enough to scare anyone about to make a decision as big as this. The key is to do your homework and focus on the major pros and cons. Some things to think about:

     - Is the franchise providing a product or service that is NEEDED? Your business should be relevant in a thriving economy, or a tight one like we are experiencing now.

     - What kind of support and systems does the franchise have in place? If the franchise has been around awhile, the brand recognition can really help bring business to you. Also, if they have strong systems and support in place, this can really help you get your business up and running.

     - Do you have enough money? Make sure there is enough to get started, as well as support yourself for a year (or recommended time frame you hear from the current franchisees) while you build the business.

     - Does the franchise system offer financing? Some franchisors offer financing to qualified candidates. This can help get the money you need if banks are not willing to lend to you right now.

     - How are the franchisees doing? Ask current franchisees how their business has changed since the econonmy has changed; Do they see a difference in revenue? Have they had to change the way they run their business? How are they reacting to the slowdown?

     - How is the corporate office supporting franchisees through this time? If the franchisees have been affected by the current financial trends in the US, what is the franchisor doing to help them survive? Some franchisors have reduced royalties or offered special promotions to try and increase business at the franchisee level. Find out if the corporate office is trying to come up with ideas to help until this downturn has reversed.

     - Negotiate Fees- If this is what you want to do, ask about what the franchisor is willing to do to get you to come on board NOW. They be struggling to add strong people to the system, and if it's a good fit for you both, they will work something out.

The bottom line is there are great opportunities out there. If it's a strong concept; good branding, support, etc... the franchise brand will survive the economic turmoil we are seeing today.