The first step is to be sure that buying a franchise is the right choice for you, compared to starting a new business from scratch. There are many advantages to owning a franchise business, including fast and easy step-up and early profits. However, there are also some aspects that you may find less appealing. For instance, your franchise agreement will stipulate certain rules and regulations to be complied with.

Once you are sure, the next step to buying a franchise is to consider your skills, interests, abilities and experience. The idea is to get a realistic idea of your strengths and weaknesses with a view to finding buying a franchise business that best suits your strengths and personality. Business of all types can fail when business owners discover – too late – that they are in the wrong line of business.

At the same time, consider your financial situation. You will need to have a clear idea of how much you have to invest before you start looking for a franchise business. Be realistic to ensure that you do not overextend yourself. The amount you have to invest will need to cover start-up costs as well as the cost of buying the franchise business.

Having worked out what line of business you are most likely to succeed in and how much you have to invest, it is time to start looking for a franchise business. Draw up a shortlist of the franchise businesses that appeal to you most.

The next step to buying a franchise business is to research each business on your shortlist. In the first place, you can search online for news articles which may give details of rising share prices, trends and other information that indicates that a franchise is doing well. Alternatively, you may find that they are heading downhill, and may take your money with them.

The most important tool for evaluating a franchise business that you would like to buy is the Uniform Offering Franchise Circular (UFOC). View the UFOC (pdf document). This is a document which franchise companies are required (by the FTC) to complete, disclosing valuable such as the number of outlets that have opened and closed and financial statements for the company as a whole. You will receive this document when you make an application to buy a franchise. A critical step before buying is to go through this document with a fine tooth comb.

If all seems well the next step to buying a franchise – don’t sign yet – is to sit back and evaluate the situation. The UFOC will have provided you with all the information you need to know about the nuts-and-bolts of owning the franchise business, financially and otherwise.

Consider if you will be able to finance all the start-up costs, overheads and investments and manage to keep your business afloat until the profits come in. Also, whether the terms and conditions are acceptable, and whether you are able and willing to comply with them.

If the rules and regulations are not feasible or to your liking, the final step to buying a franchise business is to move on to a different business on your shortlist!