During times of an economic recession, a lot of people may look at somewhere down the line starting their own business. These individuals want minimum risk and want to purchase a company that is guaranteed to work. Where are you going to find that? You won’t find it. You will only find a company that is more likely to succeed when compared with any other type of business, like a franchise.

But, as many businesses, you can still find some risk involved in purchasing franchises. Prior to making a decision, you need to look into and ask questions to find out if purchasing a chain-store will be the best solution for you. Franchising, like every other business, has its benefits and drawbacks. Pros of franchising are:

- Proven brand and product

- Marketing power

- Purchasing power

- Product and management support

- You possess your own company and are your own boss.

Negatives of having a franchise can be seen as:

- You answer to somebody

- You have to use franchise supplies

- You have to pay on-going fees

- You obtain poor and costly service backup

- You compete locally

There’s a few questions you can ask before getting into franchising. You will obtain all the necessary information you will need to make the right decision. Ask yourself these questions before deciding to purchase a franchise:

- Are you in the right location and is there/will there be a need for your product? Will you be located within an area that requires your product?

- What are the upfront charges involved? Do you have access to the capital needed to spend money on franchising?

- Is there going to be any other fees involved? There may be added expenses if you need to rent a building, property or tools to start up the company. Think about legal charges, bank costs and royalty costs.

- How will you generate profits? It is beneficial for you to find out how the company, and more importantly you are going to earn money.

- What’s the failure rate for franchises? How many franchises failed in the first year? Are the failure statistics greater or lower for your chosen franchise? Are the figures better or worse inside your chosen area?

- How many franchises sell out each year? What is the turnover rate for your chosen chain-shop? Franchises that are sold aren’t necessarily reflected in the stats for failures and several successful franchises are sold out.

I have listed a couple of questions that will help you in your franchising market research. Be sure to ask around and look into different sources. You can also meet up with a current owner and ask them about the industry: what advantages and disadvantages they’re encountering and if they’re enjoying owning it. Be sure to look at the financial history of the franchise you are looking at and decide if it meets your requirements or not. Look at the credit history of the chain-shop as well as what the main income of the shop is. Franchising present great possibilities for the future, so do not let a wonderful opportunity pass.