1. Passion Approach
"Do what you love." If only it were that simple. If that was all it took, everyone would be happy and successful as they run to the bank to count all their money. A lot of new, inexperienced business owners go with this approach. "I love to bake, I'll open a bakery. But I know nothing about managing people, marketing or accounting." UH-OH.
2. Scarcity Approach
"My community lacks a great deli, computer repair shop, fast food joint..." Whatever it is, you decide to fill the hole. This has a little more logic behind it but maybe there is a reason that there isn’t one in your community. This approach does not tackle the question of financial viability or your ability to operate one of these businesses. It might meet the neighborhood's needs but does it meet yours?
3. Security Approach
"If the franchise has a big brand name behind it and lots of locations, it must be a sure thing." Not necessarily, particularly in today's fast changing competitive landscape. A lot of times you will find newer franchises are better at things like the social marketplace and have a higher rate of return for their franchisees. And even if the brand is proven and has all the pieces worked out, it still doesn't meant that you are the right franchisee.
4. The Track Record Approach
"I was speaking to my neighbor and he owns a Subway. Every time I speak with him he tells me how great things are and he does seem to be doing very well." Of course, just because it suits your neighbor's lifestyle objectives, skills and values does not mean it will be a good match for you. In addition, the fact that there are already a number of locations in the area, owned by your neighbor, probably means that the territory is sold out.
5. The Lemming Approach
The #1 approach to franchising and it is the first question people ask me once they learn that I am a franchise coach: "What's hot? What's everyone else doing?" Can anyone say FroYo, Super Supper or Vino 100? But how viable is the industry you (and everyone else) are considering? Is it even an industry? Will it stand the test of time? And even if it will - guess what? It still doesn't mean it's the right franchise for you.
The Educated Franchisee Approach
(You saw this coming, didn't you?!)
To find a business that fits YOU, you have to start with you.
Catalog your skills. Analyze previous jobs that you've been successful at and the skills that made that happen. Did you manage people, organize things, sell, etc?
List the functional areas of business and your strengths within them. This would include things like bookkeeping, outside sales, inside sales, employee management, networking, etc.
Now use these two lists as checklists against all the franchises you are considering. Match your skills and strengths to the necessary skills of the franchise. By doing this, you will be able to improve your odds of success. Remember you're buying a business. It can be any business. It might not be what you thought it would be when it all shakes out, but every step of the way you should use the above lists and ask yourself, "Would I hire me to manage this business?"