We've been discussing franchises in our last few blog posts, and this week we continue on that same theme. So you’re thinking of buying a franchise? Below are the top ten most important things you should know about owning a franchise.

Just because you're buying into a franchise doesn't mean you don’t need large sums of capital. Many franchisors require prospective franchisees to have a respectable net-worth (sometimes in the millions) and a hefty bank account. It’s not as simple as having the will to operate a franchise— you have to put your money where your mouth is.

2. Be Happy with Your Current Location

If you want to move around over the next few years, owning a franchise is definitely not for you. Franchisors generally want their franchisees to open multiple locations in the area over a given period. Along with this, they'll also want you to be around to operate them for the duration of your contract. If you're happy with the place you live, great. If not, don't think about opening a franchise there just yet.

Traditionally, companies would not franchise their brand unless it was already expanded across the country. Nowadays companies will start franchising even with only two or three locations in one area. Be cautious of this and let the company work out the kinks in its franchising plan before buying in.

4. Try to Avoid Hidden Fees

A reputable franchisor will always provide you with financial documents showing precisely the costs you should expect during the first year or two. Some franchises might not divulge this information without you asking them to, however.

Some common costs you need to consider: 

• Rent, security and utility bills paid to your landlord.
• Legal and accounting fees
• Employee benefits and payments

 Are you the creative type, or do you like working with an established plan? If the idea of sticking to one process every day for years sounds appealing, then operating a franchise is perfect for you! When you run a franchise, you won't have much room to deviate from the plan put in place by the franchisor. If it's proven to work, just go along with it.

It’s important to know what you can expect out of your relationship with the franchisor before buying it since you will likely be locked into this relationship for quite a few years. Figure out what your franchise and royalty fees will be before signing on the dotted line.

When reviewing information from a franchisor, make sure you find out what their plans are for expansion and growth in the future. You don't want to buy into a franchise that will be expanding tremendously in your area because you will then be competing with other franchisees. If this is the case, ask for exclusivity in your territory so you can be certain you won’t be run out of town by another franchise owner.

Many new franchise owners fail to carefully research their franchise's product before buying into it. Do careful research on the demographics of your area and the competitors that fill your territory. Don’t be afraid to follow your gut here either. If the brand seems like a fad that will die off soon, don’t invest your money and time into it.

You'll want to hear what other franchisees have to say about operating a franchise location of the company. You should try to figure out how successful they are and the types of obstacles they encountered at the beginning as well as any obstacles they are currently trying to overcome.

There are many things that a franchisor can do to help support its franchisees. Perhaps the biggest support comes in the form of marketing. Chances are they will have a relatively significant budget to allocate towards these marketing efforts and sharing their resources with you will benefit both parties. However, some franchisors prefer to distance themselves from franchisees and let you run the show entirely.

Hopefully, these ten points should get you thinking and lead you to a more informed decision. Stay tuned for our future blog posts where we will continue our discussion on franchising.