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Five Steps You Need to Take Before You Buy a Franchise

Five Steps You Need to Take Before You Buy a Franchise

If you are looking to buy a franchise, learn how to identify what kind of branch is right for you with these five steps.

If you’re thinking of getting into the franchise game, it can be tempting to dive in head first and start going through specific brands to find the right opportunity for you. While that enthusiasm is commendable, it may be beneficial to take a step back and first think about what you’re looking for in a franchise system before you decide who you want to partner with.  

To help you out, we’ve gathered five steps to take not just before you buy a franchise, but before you even start looking at specific brands. So, if you’re wondering how to buy a franchise, we encourage you to go through this exercise first. You can then use what you learn to guide your research and decision making when you start talking to franchise brands.

Five steps to take before you buy a franchise

No. 1: Determine costs

As you research how to buy a franchise, it’s important to find out how much you’re comfortable spending. Franchise costs vary across brands and typically fluctuate within each system based on what type of location you want to open. For example, The UPS Store franchise cost structure varies across three different types of centers based on location, type and size.  

  • Traditional locations range from $168,885 to $398,323
  • Rural locations range from $166,659 to $309,045
  • Store in store locations range from $58,248 to $230,160

*Prices subject to change

It’s important to note, however, that you don’t necessarily have to cover the full fee with cash in hand. The UPS Store franchise system only requires you to have $60,000 of the initial fee in liquid assets. You can use loans to cover the rest. And, The UPS Store also offers access to tools and financial assistance to help new owners cover initial expenses.

Due diligence is essential here; as you research opening a franchise business and start looking at specific brands, ask about startup fees and financial assistance options. More importantly, make sure the franchise brands you consider have a pricing structure that aligns with your investment tolerance.

No. 2: Determine your ideal system

In this step, don’t worry about identifying specific franchise brands. Instead, you may find it easier to back into a specific brand by first identifying characteristics that match your interests, values and skillset. Ask yourself questions like:

What am I passionate about?

Make sure you choose a franchise system that allows you to do work you’ll enjoy. Think of your answer to this question in broad terms. For example, if you love helping people, then look to partner with a brand that prioritizes customer service and one-on-one interaction with consumers.  

What industry do I want to work in?

Next, get more specific and think about what type of products and services you want to provide. Do you want to help small business owners, serve food, cut hair, etc.?

Where do you want to work?

Do you love city life? Or, is a slower-paced, rural environment more to your liking? Find out what type of market aligns with your preferences. Then, as you research franchise brands, make sure they have available centers in a market that meets your needs.

No. 3: Decide what kind of business structure meets your needs

Again, identifying a specific brand here isn’t the goal. What you want to do is determine what business traits (e.g., name recognition, maturity, growth potential, etc.) are most important to you when opening a franchise business.

Do you want to go with an up-and-coming, newer brand? Or, would you prefer to work within the safety net of a well-established brand? There isn’t necessarily a right or wrong answer here, but there are some factors to consider. Newer franchise systems are often working through the growing pains and may not have set procedures and processes in place to help new franchise locations reach their full potential. On the other hand, established franchise brands have that stuff down, which can make it a lot easier for you to get your business up and running (and, ideally, turning stable profits) sooner.

Another consideration is the size of the franchise system. Do you want to find a small franchise to invest in (maybe 50 locations or less)? Or, would you prefer a larger system (hundreds or thousands of locations)? While there is some appeal of being a big fish in a small sea, larger location counts have their advantage. For example, at The UPS Store, we often hear from owners how advantageous it is to have an expansive network of owners you can reach out to for tips and advice for running your business.

“One of the most significant assets we have in the franchise model is the ability to network with other franchisees, visit their stores and find out how they're operating,” says The UPS Store multi-center owner Jay Patel. “It gives you more confidence as an owner to learn some of their best practices and incorporate them into the way you run your store.”

No. 4: Analyze your skills and experience

If you’re considering opening a franchise business, chances are you’re looking for a change from your current career, which means you might not have experience in your chosen industry. If you join an established franchise brand, that’s fine – as long as you go with a brand that offers plenty of training.

Even if you choose an industry that you have a lot of experience in, you’ll probably need a decent amount of training to learn the ins and outs of the specific business. As you research your options, ask each brand about the initial and ongoing training programs they offer.

The important thing here isn’t finding a brand in an industry you’re familiar with, it’s to understand what kind of learning curve you’ll have. So, make sure you approach each franchise opportunity with a clear understanding of your experiences, skills and opportunities to improve.

No. 5: Make sure there’s enough demand in your industry

Even if a brand is opening hundreds of new locations every year, it doesn’t mean they should. Whichever industry you choose to buy a franchise in, make sure there’s a healthy amount of consumer demand. This step is essential for finding a franchise brand with enough growth potential not just for your initial investment, but that can also support additional locations if you decide to branch out to more locations in the future.

Similarly, as you research specific brands, make sure they have a sound strategy for choosing which markets are suitable for new franchise locations. At The UPS Store, we consider a variety of factors to determine markets for new centers including metro population, external competition, presence of other nearby stores and potential traffic.

To learn more, check out available markets with The UPS Store or contact our franchise development team for more information.

2023 Entrepreneur's Franchise 500 Top Rated for Veterans badge

We Proudly Support Our Veterans

Participating partners with the VetFran program, The UPS Store offers qualifying veterans $15,000 off their franchise fee to start their new business. To learn more, contact The UPS Store Franchise Development Team.

Entrepreneur's Franchise 500 Ranked #4 in 2023 badge

Ranked for over 30 Consecutive Years

The UPS Store has been ranked #1 in the postal and business services category for over 30 years and remains in the top 5 overall for the seventh consecutive year according to the Franchise 500 list.

Kristin Howard

Franchisee, Michigan

The reason my husband and I decided to go into franchising and specifically with The UPS Store, is the different opportunities we're given with the business. The UPS Store has name recognition as well as opportunities to expand.

Debbie Adams

Franchisee, Kentucky

What I enjoy most about being a The UPS Store owner is working with my customers. We are the solution specialists for our customers.

Jim George

Franchisee, Illinios

My favorite part about The UPS Store network is the camaraderie with other franchisees. Everybody loves to help everybody else. You’re really part of a family.

Greg Murray

Franchisee, Florida

The interesting thing about The UPS Store is that when a customer walks through the door there's an extremely high probability that they're coming there to do something that is important to them. So at the end of the day, what we do for customers is very important and they are trusting that we are going to do it well.

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Mariana Huberman

Franchisee, Washington, D.C.

One of the things that I love about The UPS Store franchise system is that you're not ever in this by yourself. The franchisees of The UPS Store network are great.

Heidi Morris

Franchisee, Colorado

The thing I enjoy most about being a The UPS Store franchisee is I get to get up, go to work and know that I'm helping other business owners succeed in what they're doing.

Bob Brown

Franchisee, Tennessee

Owning a The UPS Store franchise has changed my life because it's finally given me the opportunity to engage my customers and my staff and be able to take real pride in what I do. As a franchisee, we get faced with solving peoples' problems every day and we do everything we possibly can to try to help.

Marie Jensen

Franchisee, Oregon

My favorite thing about The UPS Store is the variety. I love the variety of customers, I love the variety of services; getting to know the customers, meeting their needs, finding out how we can help them accomplish what they need to accomplish and seeing how happy they are. That makes me ecstatic.

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Tad Mollnhauer

Franchisee, Florida

With the products and services that The UPS Store provides we can make a difference in people's lives and that is the best reason for being a The UPS Store owner.

Joy Batchelor

Franchisee, Idaho

What makes being a The UPS Store franchisee worthwhile at the end of the day is the customers. The customers treat us like we're family.

Paul Erchinger

Franchisee, Texas

One nice benefit of owning a The UPS Store franchise for me has been that it gives me the opportunity to be more involved in the community. As I make relationships with others it seems like no matter what the environment is, in one way or another business comes out of that and that's not my objective—it's been a secondary benefit to being involved in the community.

Chris Reminder

Franchisee, Ohio

There are several things that I really enjoy about being a The UPS Store franchisee. First and foremost it allows me to get to know the people in the local community and that is a lot of fun. We get to see people on a regular basis. We get to know their life stories. That's a lot of fun.

Bruce Jones

Franchisee, Kentucky

Since we have joined The UPS Store, our life has changed by just having more time to spend together as a family. We've been very fortunate with the stores that we have and we have a great staff that looks out for our best interest and we look out for theirs.

Lonnie Williams

Franchisee, Oklahoma

What makes The UPS Store so successful is it gives each individual an opportunity to grow with the network and just meet the challenges that are brought to them on a daily basis. Every day gives us a new opportunity to help another person, to help another small business, to answer a question and to solve a problem.

Jeff Graham

Franchisee, Alabama

I love my customers. I love my employees. I love every person, every face that comes into my store. I enjoy every day going into work and I can't see doing anything else for the rest of my life.

Stacie Stigar

Franchisee, Alaska

I think that this franchise is so successful because of all of the resources that are available to us as center owners—we have marketing materials, we have so many different opportunities for help from the home office, and it just really makes for a great franchise.

Don Pollard

Franchisee, New Jersey

I think the thing that makes this franchise successful is a number of things. First of all we have an outstanding system, we have a great product, a great brand, and we're able to attract dynamic people to run these centers and run the business. So I think when you put all that together it really provides for a winning combination.

Mary Ellen Nichols

Franchisee, Tennessee

The thing I love about the franchise is that you have the UPS name backing you but yet you also have the autonomy to make your own decisions to promote.

Laura Griffin

Franchisee, Florida

In the eight short months I've owned my The UPS Store it has really changed my life. I've gone from being an employee of someone else to being an employer of my associates. It's a big responsibility but it's exciting every day.

Sandy Scandrett

Franchisee, Wisconsin

Being a The UPS Store franchisee has improved every aspect of my life. It's very rewarding financially, professionally, and emotionally. I have a large number of regular customers who are really, really appreciative of everything we do.

Kristie Robison

Franchisee, Alabama

I would say owning a The UPS Store location has changed my life to where I have more time and flexibility. In owning your own business you get your store up and running and you get employees that you can trust that are going to help keep your store running. This allows me to attend my two boys' ball games and also travel and do things with them so it has really changed my life for the better.