So you’re stationed in Germany, but you’d like to lay the groundwork for a fast-food franchise outside Fort Campbell, Ky. Or perhaps you’re on a ship in the Persian Gulf trying to figure out how much it would cost to buy a carpet-cleaning franchise in San Diego.
Don’t let the distance delay action. You may not be able to completely purchase a franchise online, but you can find many free resources to help choose a franchise, find financing and do everything up to signing on the dotted line.
When your ETS date does arrive, you’ll be ready to cut the ribbon and open your new business.
A good place to begin your search is at one of several Web sites (see list) that offer valuable information about hundreds of franchises.
Many include links to popular lending companies, articles on franchising and links to other resources.
Possibly the most valuable service offered at these Web sites, though, is a connection to franchise brokers. By filling out a short form, you can be connected on a no-cost, no-obligation basis with a broker.
Brokers work much like real-estate agents. They represent a variety of franchises and are paid a commission by the franchiser.
Potential buyers are not charged for the service.
Brokers use an arsenal of assessment tests and tools to help entrepreneurs determine which franchise best matches their budget, interest and skills.
“You get a lot of personalized information from a broker,” said Kathy Tito, manager of online marketing for franchisebuyer.com and franchisesolutions.com, two popular franchise listing Web sites which both offer connections to brokers.
“A broker is dedicated to helping you with your franchise purchase. The broker will review with you your personal and financial goals. Then, you’ll receive a list of recommended franchises,” Tito said.
The two Web sites Tito recommends generate leads for franchise brokers. The sites have information on more than 300 franchise offerings. Required investments range from $10,000 to $300,000.
Window-shop with care
Visiting these sites is like window shopping. You can get information on the cost of a franchise, needed investment capital and available locations often with a single click.
Spend a couple of weekends browsing to give yourself a good idea of all the available business options.
Feel free to request more information, but hold off on signing a contract with a broker until you’re familiar with the world of franchising.
As you browse, keep in mind that Web sites are supported through advertising and by generating leads.
Don’t assume that all franchises listed are legitimate.
Watch out for business concepts labeled as “business opportunities” instead of franchises. These are generally considered higher risk.
Many scam artists market schemes under the “business opportunity” label because it doesn’t fall under the right franchise codes.
Common opportunities include stuffing envelopes from home, vending routes and pay telephones. While some business opportunities are legitimate, exercise more caution when considering one of these.
Choosing a broker
Window shopping is free. At some point, though, some brokers will ask you to sign a contract agreeing that they will represent you exclusively.
Likely, you’ve signed a similar one with a real estate agent.
Once you’re aware of all the different options and find a broker whose personality goes with yours, consider these last-minute warnings before signing:
• Think twice if a broker asks you to pay for their service. Franchisers traditionally pay.
• Find out how many franchisers a broker represents. If he only represents a few, find another one whose options are wide enough to find a perfect match.
• Do you want a new or established franchise? Some brokers can only put you in new franchise locations. If you want to buy an already established franchise, make sure the broker deals in resales.
• Make sure the broker can access the discounts offered through VetFran, a program offered by the International Franchise Association. Hundreds of franchises participate, guaranteeing veterans the best offer.
Still do your homework
Don’t expect the broker to do all of your homework for you. While brokers can be very instrumental in narrowing your choices, it’s ultimately your investment and your decision.
Before agreeing to a purchase, carefully read a company’s Uniform Franchise Offering Circular and talk to current franchise owners.
Finally, be patient. Using a combination of e-mail, faxes and telephone conversations, you can almost buy a franchise from anywhere. The process likely will stop just before the actual purchase.
After all, you’ll likely want to look at proposed locations and franchisers will want to meet you in person.
Web franchising resources
The following are some Internet resources to help jump-start your search for the right franchise:
• www.sba.gov — The Web site of the Small Business Administration offers a great section on starting businesses. Two online booklets are great franchising primers: “Is franchising for me?” and “The Consumer Guide to Buying a Franchise?”
• www.franchisedirect.com — This Web site connects you directly to the franchiser. Browse around and fill out a contact sheet to receive more information.
• www.franchisesolutions.com — Register and you’ll be matched with a franchise broker.
• www.franchisebuyer.com — This Web site also offers a broker service. An online net worth calculator can help you determine your price range.
• www.frannet.com — The Web site’s research guide makes it worth a visit. It also offers broker referrals.
• www.bison.com — This site offers comprehensive franchise listings. A quick self-test can help you determine if franchising is a good choice for you.
• www.franchise.org — The Web site of the International Franchise Association offers basic franchise information and links to companies participating in VetFran.