There are many issues to consider to assess whether franchising, and the franchise you have identified is right for you.

If it’s too good to be true – guess what? It usually is.

Assess – understand – commit.

Here are 10 things to consider:

1. Will it be financially viable?

Do an objective financial analysis in advance. Be honest with yourself – can you draw a reasonable wage from the business and a return on your investment over time?

Ask for financials from the franchisor. If you can’t get financials from the franchisor, prepare your own financial projections and have the franchisor review and comment on them.

Use your accountant to test your financials and assumptions. The money you spend doing this up front will save you thousands of dollars down the track – and some despair!

Don’t just buy yourself a low paid job. If the numbers don’t work – walk away!

2. Is it what you want to do long term?

Picture yourself in the franchise business in 12 months from now.  Can you see yourself doing the work with the same level of enthusiasm?

Consider the impact the business will have on you and your family financially, emotionally and in terms of demands on your time. If selling smoked chooks is your thing, fine – but the novelty might not last long.

3. Understand your obligations

Be sure you know what you are getting into and request an in-store introduction or a come-and-try training day if you can – “try before you buy”. Make sure you talk to other franchisees.

Ask yourself if you are suited to being a franchisee. Can you follow a system and directions and be accountable to someone else? If you have previously run your own successful business in the past will you be happy as a franchisee?

4. Review all aspects of the business

This is the time for honesty and objectivity. Check out the good, the bad and the ugly. Do your due diligence on the franchisor and their team – just like they do with you.

Ask to meet the operational and support manager who would be supporting you as a franchisee.  Do you feel you can work with them? Gut feeling goes a long way.

5. Seek expert advice

Talk to a specialist franchise lawyer and an experienced franchise accountant.  Not your local solicitor. An experienced franchise lawyer will know what to fight for and what to leave alone. Some lawyers will destroy the franchise relationship before you have a chance to begin!

Pay for and get good advice.  Don’t cut costs. Good advice costs money but bad advice will cost you more.

6. Research the business

How does this business model compare to others in the industry? Look at the competitors – who does it better? Compare systems, fees and costs.

Is there an opportunity to grow the business, take on multiple franchises? Is that encouraged? Find out how many franchisees are multi-unit operators.

7. Work out how you will make money

Accept that you may end up with a salary but no return on your investment (ROI) over the term of your franchise.

There may not be an opportunity to reap a capital gain at the end of the franchise, and you have no right to a lump sum on expiry of your franchise.

As there is no guarantee you will have a business asset of value to sell at the end of the term, therefore no capital gain, you should at least ensure you can draw a salary along the way, comfortably pay the interest on any loans taken out to buy the franchise and also show a profit each year (ROI).

8. Plan your business

Prepare a detailed business plan- use your advisors and plan for the expected and unexpected.

Make sure you have the finance before you begin negotiations.

Make sure you have sufficient working capital when you start out, particularly if this is a brand new or greenfield business.  Many franchisees underestimate the amount of working capital required.

9. Get friendly feedback

Talk to your family, friends and advisors. They will all give you feedback and help you make an informed decision.

10. Think again – is this right for me?

Will this be the best decision financially and emotionally? Buying a franchise is a long term commitment, so get it right from the start – a wrong decision can be costly.