How to Evaluate a Franchise Opportunity

Are you concerned about choosing the ideal franchise for you from the thousands of opportunities now available today? Many prospective franchisees have been down this road before and have reaped some amazing rewards from their venture–which just shows you there are many franchises where you can succeed as a business owner.

Of course, getting into the best franchise requires some due diligence. If you’re like most prospective entrepreneurs going through the franchise search, you’ll want to establish a set of criteria by which to judge each franchise. This means getting a feel for the franchise’s business model, what would be required of you, and how it aligns with your passion and goals. Below is a guide compiled in collaboration with fitness franchise, F45 Training, to help you narrow down your options.

The market

A franchise’s business model may be proven successful but that doesn’t mean there’s a market for it yet. Ask yourself these kinds of questions: Does your town really need another fast-food restaurant? Can you offer something different that will give you a competitive advantage? Will people in a retirement town really be interested in your beauty franchise? Such questions can help you analyse where the franchise fits within the market.

Company reputation

A high failure rate is always a red flag. The goal of buying a franchise is to have better security as a business owner, so it makes sense that a franchise with many defunct units deserves to be scratched from your list. Also look at online customer complaints and compliments to judge how effective or not a product/service is (Refinery29 shows an example of this, and an F45 franchise review by an owner can also be watched). A franchise that’s been in business for quite a few years, has many successful units, and is still opening doors across the country, is your best bet.


Whether you’re paying out of your pocket or applying for a business loan, cost is probably an important metric for you. Different franchises have different costs, so make sure you have a good idea of what you’ll pay for the franchise you’re interested in and whether you can afford it. As well as the initial fee, you’ll need to pay a percentage of your profits as royalties, and additional fees, which may be for marketing and training.


Nothing helps you succeed as a franchise owner more than having adequate training and continuous support. Look for franchises that have comprehensive and updated training systems for experiential learning. Great franchises will give you opportunities to grow your investment and provide you with a strong support network as you build your business.

Franchise Disclosure Document (FDD)

The FDD will be able to answer any questions you may have regarding what the company offers you. It will have a wealth of information on the company’s history, the business model, legal issues, fees and financing, your obligation as a franchisee, what support you’ll receive, your territory, restrictions, and turnover rates, among other things. Be sure to read this over with your attorney to understand what you can expect from the franchise relationship, and if it is something you’d like to pursue.

Buying a franchise might be the biggest investment of your life. To ensure you get the highest return and that your investment bears fruit for many years to come, you should always evaluate the benefits and risks involved. Considering these steps will help you determine the potential of a franchise opportunity.

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