Not everyone can purchase a franchise. Although the qualifications for a franchisee vary from one company to the next, there are certain standards that need to be met before you will be approved as a new franchise owner. The following are a few of these standards that all companies are looking at in a new franchisee.
Your credit rating
Even if you were to buy into a franchise for cash without any type of financing, they will still want to see a good credit rating. Your credit score will demonstrate a high level of responsibility, and this is one of the most important attributes a company is looking for. Although a franchise owner, to a certain extent, is going into business for themselves, it is also true that you will be entrusted with a brand name. You will be expected to follow certain rules, so you are promoting and defending the brand.
Your ability to pay the franchise fee
Some franchise fees and other costs to get started are lower than other companies. This is true for newer franchise opportunities and lessor known names. However, well known, national chains are likely to have high initial start-up costs, so most investors will need financing. A company will want to know the specifics of this financing, so they are confident that you have a good chance of success. A new franchise location that closes its doors becomes a black mark on the brand name of the business chain.
The amount of business experience you have
Most companies are not looking for specific knowledge of the product or service they are selling. What they are looking for are people who have the knowledge and experience of running a company. Some of this can be direct experience while some of it may be from education, but it is important that a new franchise owner be able to manage a business.
If you can qualify for a franchise, you still need to decide on what area of business you will want to be engaged in. There are fast food, retail stores and auto franchise opportunities to name only three. You should choose something you enjoy.