GREAT 35 IDEA: Consider Buying a Franchise

Franchising in the United States is a $2.3 trillion-a-year industry employing about 21 million Americans. Franchise companies offer thousands of different businesses, from janitorial services to beauty salons to business coaching.

Between 2001 and 2005, the franchising sector expanded at a faster pace than many other sectors of the U.S. economy. Direct economic output of franchised businesses grew by over 41 percent, while economic output of all businesses grew by 26 percent, according to the International Franchise Association (IFA).

The number of franchised establishments grew by 18.5 percent compared to 15.9 percent for establishments created by all businesses.

But operating a franchise is not for everyone. A franchise provides people training and a firm structure for running a business. It's not recommend for people who prefer to do their own thing.

Here are some tips from the IFA to help you do your homework:

• Meet with the franchiser; get to know key players.
• Consult any and all advisers who can help you make a decision.
• Ask questions. No question is too trivial.
• Compare other franchise systems in the same field.
• Make sure you'll be comfortable doing what the business model requires.
• Read and understand the Uniform Franchise Offering Circular, and know all the details and terms of your contract.
• Check the references of the franchise's officers and managers.
• Research, research, research. The more you know, the better your decision is likely to be.

Contact the International Franchise Association at (202) 628-8000 or visit (http://www.franchise.org.