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So You Want to Buy a Franchise? Here's What You Need to Know First

So You Want to Buy a Franchise? Here's What You Need to Know First

If you're looking to buy a franchise, here is what you need to know first. 

Franchising can be a great way to satisfy your entrepreneurial aspirations. When you join a franchise network you get the benefits of an established brand name, blueprint for running your business and support and guidance along the way. There are a variety of tools and resources available you can use to help research how to buy a franchise. But there are a few things you need to know before you dive in to ensure you don’t end up in over your head.

Industry and market conditions

When you buy a franchise, the overall health of the industry you choose, as well as local market conditions in general, are critical. When determining which franchise network to join, consider which sectors have a history of strong performance. Identify the industries that are growing and why. It’s important to be clear on what growth looks like for the brand as a whole.

Study your local market area. It’s important to evaluate the demand in your community for the products or services the franchise offers. Consider whether it’s long-term or part of a passing fad that will soon fizzle out and leave you on the hook with the franchisor.

Also, assess the competition in the area. Even a brand with national dominance could be trumped by a local favorite. Evaluate the competitive environment and think about how the unique selling proposition of any brand you’re considering stacks up.

Roles and responsibilities

Although every franchise system is different, the franchisor is typically responsible for developing the business concept, product or service, brand, logos/trademarks, systems and processes. Initial and ongoing training is usually provided, as well as marketing and advertising support.

As a franchisee, you should be prepared to take on hiring, firing and training staff, managing finances, selling the products or services and ensuring quality meets the brand standards. You will likely also spearhead local marketing and promotional activities.

The specific roles and responsibilities of each party are outlined in the Franchise Disclosure Document. Review it carefully to get a clear understanding of expectations, on both sides of the relationship.

Level of commitment and dedication required

When you buy a franchise you may get a turn-key business, but it’s not a passive investment. Owning a successful franchise takes work. Even though you may hire a manager to run your location and have a whole team of employees, no one else will care about the business as much as you do. It’s imperative for you to be actively engaged in all facets of running your business and constantly seek ways to improve.

Since you’re going to be involved day in and day out, it’s important to find a business you enjoy. It will be much easier to stay enthusiastic and motivated for the long haul if you love what you do.

No matter what industry you choose, hard work and dedication are required. The best franchisees understand and accept that fact and are willing to do whatever it takes to get the job done.

Amount and type of training and support provided

Ensuring all owners within the network understand how the business is supposed to operate is critical to the success of both the franchisee and franchisor. The amount and type of training varies greatly depending on the industry and the complexity of the business. More sophisticated brands provide extensive training to teach their franchisees everything they need to know to be comfortable operating their business before they ever even open their doors.

When exploring the training provided, determine who is eligible (i.e., only certain levels of staff or all employees), how long it will take, what it will cost and who will pay for it. Also gather some background on who will be conducting the training and their qualifications or level of expertise.

Brands that truly believe in investing in your success will provide ongoing support and guidance as well. Spend some time researching what resources will be available once the initial training is complete and you’re open for business.

All costs

The cost to buy a franchise is typically less than startup costs to launch your own business. That said, it’s still important to have a clear understanding of all initial and recurring fees and expenses.

The franchise fee is a one-time, upfront cost of entry that grants you the license to own and operate the franchise business. Keep in mind you may also incur costs for real estate, inventory, equipment, insurance, business licenses, signage, etc. Once open, royalties and advertising fees kick in. Royalty fees are often based on a percentage of your revenue and are paid to the franchisor at regular intervals. Advertising fees are contributed to a collective pool of funds used to market the brand.

Although it may seem like a barrage of fees, one of the advantages of joining a franchise network is knowing what the startup and future costs will be.

While there is typically less risk associated with opening a franchise than building a business from the ground up, success is not guaranteed. It’s important to take the time to thoroughly research the opportunity before signing on the dotted line.

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.