Buying a Franchise

MoneyWatch for July 2007
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Starting a business from scratch is a risky move, some may say too risky. Buying a franchise could be the answer for those who have the desire to own a business without the enormous amount of uncertainty that comes with opening a brand new company. Franchising is the purchase of a license. As a franchisee, you are able to use the franchiser’s trademarks, advertising symbols, and business name, all of which are already recognized. In return, you must agree to use certain systems and follow certain procedures set forth by the franchiser.

The challenge of finding the right franchise that interests you, complements your skills, and one that you can afford can be quite overwhelming. The answers to the following questions are important before making such a decision.

Will I be comfortable with the level of the franchiser’s decision?
In what area of business do I have the most expertise?
Am I a good manager of people or do I prefer to have no employees?
How much money do I have to invest?
Does my family support my decision?

The decision is not only based on what works best for you, but also by looking at what industries are doing well or predicted to do well in the future. The following is a list of hot franchising trends for 2007:

Senior-care services: As the baby boomers age the need for senior care services is also increasing. This includes non-medical healthcare for seniors who want to stay in their home as long as they can, but need some assistance.
Personal-care services: There has been a growth in franchises offering laser, massage, fitness, and tanning services. This too is due to the aging baby boomer generation who still has a desire to look young and enjoys indulging is these types of services.
Staffing and business services: According to the Bureau of Labor Statistics, staffing services will be one of the fastest growing industries in the next five to ten years. Staffing and training is a very important part of any business and it is not one in which many businesses do extremely well in. This process is easily and often outsourced.
Education and tutoring programs for kids: As colleges get more competitive, parents are doing what they can to make sure their children excel. Also adding to the demand for these businesses is The No Child Left Behind Act, which requires schools to provide tutoring services if their programs do not meet certain standards.

Click on the links below for local franchising opportunities and more resources.

Local Franchising Opportunities

Beauty service for bedbound looks to branch out by franchising
Utah printer to expand NE Ohio operations

Local Franchise Success Stories

Long time friends launch area’s first Wireless Toyz franchise
Keller Williams expands NE Ohio Stake
What’s it cost: Cuts Fitness

Local and State Resources
Crain’s Cleveland Business: Carefully consider all Aspects of Owning a Franchise
The Franchise King: Franchise News and Trends in NEO
COSE: Franchising: A Business in a Box or a Can of Worms?
Franchise Solutions: Ohio Businesses and Franchises for Sale
Newsnet5: 10 Tips for Investing in a Franchise

National Resources

SBA: Consumer Guide to Buying a Franchise
Federal Trade Commission: Facts for Consumers on Franchise and Business Opportunities
The American Franchisee Assoc: What you need to know before an agreement is signed

Support for MoneyWatch is made possible by Charter One Foundation.

Research assistance for MoneyWatch is from Cleveland State University Nance College of Business Administration. Information on the Nance MBD program is available here.