Check It Out

Get The Facts

As useful as the UFOC and current owners may be, they don't tell the entire story, and it is certainly not the end of your investigation. Now you must answer a few fundamental business questions: Will the concept be successful in your marketplace? What will your competition be, and has the competition been successful in this market? Is there a site available that will make the business a success?

These questions are vital to your decision-making process. Even if the franchise is homebased, you must still assess how the business will be received in your market. Most market evaluations begin with a "walk-about," a drive around town observing local businesses and talking to their owners. What businesses are newly opened, and what looks like it's going downhill or is recently boarded up? This will tell you a lot about the business trends in your area. Talk to merchants whose businesses are similar to the one you're planning.

You should also stop at the public library and check the demographic information available. Is the town growing? Where are the new neighborhoods being built?

The last two steps in your investigation are to consult a good accountant and retain a savvy lawyer.

Investigating the purchase of a franchise is not all glamour and glitz, but it must be done if you want to open your new business knowing in your heart you made the right decision.

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This article was originally published in the January 1998 print edition of Entrepreneur with the headline: Check It Out.

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