Before selecting a franchise system it is a good idea to do some upfront research on the franchises you are interested in investing in.  There are a number of companies to chose from that can help you conduct research on a particular franchise system. You can also conduct your own research by reviewing the companies Uniform Franchise Offering Circular (UFOC) which has detailed company information. You also need to carefully consider how much money you have to invest, your abilities, and your goals.  The following checklist may help you make your decision.

Your Investment

• How much money do you have to invest?
• How much money can you afford to lose?
• Will you purchase the franchise by yourself or with partners?
• Will you need financing and, if so, where can you obtain it?
• Do you have a favorable credit rating?
• Do you have savings or additional income to live on while starting your franchise?

• Does the franchise require technical experience or relevant education, such as auto repair, home and office decorating, or tax preparation?
• What skills do you have?
• Do you have computer, bookkeeping, or other technical skills?
• What specialized knowledge or talents can you bring to a business?
• Have you ever owned or managed a business?

• What are your goals?
• Do you require a specific level of annual income?
• Are you interested in pursuing a particular field?
• Are you interested in retail sales or performing a service?
• How many hours are you willing to work?
• Do you want to operate the business yourself or hire a manager?
• Will franchise ownership be your primary source of income or supplement your current income?
• Would you be happy operating the business for the next 20 years?
• Would you like to own several outlets or only one? 

Selecting A Franchise

Like any other investment, purchasing a franchise is a risk.  When selecting a franchise, carefully consider a number of factors, such as the demand for the products or services, likely competition, the franchisor's background, and the level of support you will receive.

Demand

Is there a demand for the franchisor's products or services in your community?  Is the demand seasonal?  For example, lawn and garden care or swimming pool maintenance may be profitable only in the spring or summer.  Is there likely to be a continuing demand for the products or services in the future?  Is the demand likely to be temporary, such as selling a fad food item?  Does the product or service generate repeat business?

Competition

What is the level of competition, nationally and in your community?  How many franchised and company-owned outlets does the franchisor have in your area?  How many competing companies sell the same or similar products or services?  Are these competing companies well established, with wide name recognition in your community?  Do they offer the same goods and services at the same or lower price?