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What is a Franchise?
Owning your own business is a dream many of us possess.  One of the most common ways to achieve it is through the purchase of a franchise.  The concept of franchising involves the selling of an established method of doing business to someone else.  Many retail and mobile-based businesses these days are actually franchises.  The parent company provides brand-name products or services, plus support in the form of training and advertising.  In return, the franchisee pays fees and royalties to run the individual business.

The Franchise Buying Process
There are a number of steps one should follow in order to determine (a) whether buying a franchise is the right move to make, and (b) selecting the proper franchise to purchase.

• Understand the benefits of owning a franchise
  Franchise operations provide instant brand recognition among consumers.  Investment risk is generally lower than when starting a company from scratch, since the overall business plan has been proven through the success enjoyed by other franchisees.  You will receive considerable assistance from the home office, which could include extensive training for management and employees, the use of exclusive business-operation hardware and software, and significant advertising support.
• Recognize the limitations of franchising
  A franchisee has lots of rules to follow, and you will pay a certain amount of money every month – a percentage of your revenue that could reach double digits – for the privilege of running the franchise.  There may also be restrictions as to what sort of independent ads you can run, how and where you can expand, and where you must buy inventory or supplies.
• Investigate which franchise to buy
  With something like 75 different franchise industries available to the buyer – everything from food to autos, and from personal services to consulting – the choices are clearly staggering.  Selecting the correct franchise will take a lot of time and effort.  First you must settle on a particular concept.  Will you operate a retail location, a mobile operation, or work from home?  Then there is the particular field to select.  What about fast food, or auto repair, or daycare, or interior design consulting?  In each category you will find dozens of franchisors (and maybe more than a hundred), each anxious to sell you a business opportunity.
• Assess your financial situation
  After narrowing your franchise choices, it makes sense to look at the amount of money you have to invest and how much each opportunity will cost.  Closely examine the upfront franchise fee and also calculate the amount of royalties you need to pay every month or quarter.  Price alone should not govern your final decision – compare what you pay against what you will receive in return from the parent company – but be sure to acknowledge that every franchise opportunity will require you to hold in reserve a fair amount of cash to overcome whatever slow times you encounter while building your business into a successful enterprise.
• Read, investigate, and examine
  Every franchisor is required to provide a mountain of material to prospective franchise owners.  These documents explain your rights and obligations as a franchisee, and their rights and obligations in return.  There is also considerable information on the financial health of the parent company, what sort of legal difficulties they may have encountered, and how many franchisees have closed their doors over what period of time.  You will want to look everything over with great care.  It also pays to speak with other franchisees within the system, making sure to ask them pointed questions about the success they are having versus what was promised, how long it took them to find their market, and how well they get along with the franchisor.
• Seek out expert advice
  Talk to your banker about your credit rating, the possibility of a business loan, and other ways to finance the purchase of a franchise.  Discuss with your accountant or CPA your current financial situation and lay out a plan to take on the burden of buying a franchise.  Engage the services of a franchise attorney to review all the paperwork and possibly even help you decide which of several different franchise opportunities will be your best bet for success.

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