Grab a bite to eat, ship a package, get the car repaired, drop your child at day care, attend an at-home shopping party or visit a host of other retail or professional outlets. In any one of these ventures, chances are great that you have patronized a franchise.

As a sector of business, franchising contributes more than $1.5 trillion to the U.S. economy. That's nearly 10 percent of the private-sector economy, according to the International Franchise Association. In addition, franchises employ more than 18 million people.

Deciding whether to own a franchise means facing a staggering number of choices. There are nearly 2,500 franchise concepts, with 500 of those in the fast food industry alone. Over the past three years, the International Franchise Association reports, nearly 900 concepts started franchising, with more than half starting in 2005.

So where to begin?

First, realize that even though it will be your franchise outlet, you're not the ultimate boss. "Any time you get involved in a franchise, you're not in business for yourself; you're in business for the franchisor," says Mike Stover, who works with franchise clients at Brady Ware, a Leading Edge Alliance firm.

McDonald's, for example, has significant influence over its franchised stores on everything from how to advertise to how to make a Big Mac. "That's not a bad thing," Stover says. "You don't have to invent a menu. You don't have to provide training (on your own). There's an already proven process."

He says people buying into franchises want a proven concept. They want to know it works and is profitable.

Leading Edge Alliance firm SS&G Financial Services' Teresa Moore, who leads the SS&G Restaurant Services' franchise accounting sector, agrees. Of course, with the rapidly growing number of franchise concepts, some concepts may not have had sufficient time to prove successful.

"If they haven't had that time, you're taking a chance and should somehow cover yourself in case the franchisor doesn't live up to the expectations," Moore says, adding those protections could include paying your franchise fee over time or allowing for a refund for unfulfilled obligations.

Both Moore and Stover advocate thoroughly investigating before buying into any franchise. "Do the research, look at the demographics and you'll have a lot better chance of succeeding from the start with that support," Stover says.

Moore says if a franchise is successful in one market, it does not guarantee success in another. For example, a franchise targeted at upscale clientele would not do well in an area lacking such clientele and vice versa, she says.

Applebee's, for whom Moore has worked, does its own demographic research before it will approve a new franchise. She says that indicates the parent company is interested in success as well.

"Some franchisors just want the franchise fee," she says.

That's why Moore urges franchisee prospects to read the fine print before they sign franchise or development agreements, identifying all fees and hidden agendas, and making sure royalties are reasonable.

For example, the franchisor could spell out in the agreement that a franchisee is to use a specified construction company to build the restaurant. But if the construction company is based in Atlanta and the franchisee is building in Colorado, who covers the cost of travel and housing? If it's the franchisee, that can add on a significant expense that likely would have been unexpected without asking first.

Another way to check on the franchisor's reputation is to see if it owns any stores itself. "Call other franchisees of the concept and ask them hard questions," Moore says.

Stover, who works with franchises such as KFC, McDonald's and Chuck E. Cheese, says most franchisees already have experience in the industry. "A lot of McDonald franchisees worked at McDonald's and had a good experience," he says. Buying into the franchise is not purely financial for them, the franchisees are building on their positive experiences too."

Even if a prospect franchisee has not worked for the franchise, he or she must have a familiarity with the industry. "You have to know the business you're getting into whether it be kiddie care or restaurant," Moore says.

In addition, franchisees should expect to put together a good team of advisors, including a CPA, to help make the best decisions. "You need your own advisors," Stover says. "Franchisors look out for the franchisor. It's not always the same interest at heart."

Accounting systems and financial reporting also could be dictated by the franchisor. Others allow flexibility. If they're not specific, use the system and software that bests fits your needs and budget, Stover says.

Other questions a new franchisee needs to answer include how its own company will be structured. Will it be a sole proprietor, a limited liability company or some other entity?

And the essential component of any successful franchise is a well-capitalized franchisee who understands how expensive it is to get started. Moore advises that franchisees be able to operate at least a year without making any money, and certainly not expect any income in the first month.

Initial fees can vary from a few thousand dollars to millions, according to an International Franchise Association Educational Foundation study. Franchisees can expect to pay less than $5,000 for some sports and recreation franchises to nearly $6.5 million for hotels. Fast food franchises, the most popular sector, can range from $180,000 to $3 million, the study reports.

Stover says while franchises are expensive to start, they also require capital reinvestment for things such as new signs, equipment, etc. "There's plenty of opportunity to go deeper into debt," he says.

Franchisees should strive to pay down their debt as soon as possible, making sure they do not sign loan agreements that include pre-payment penalties. "If you're able to be on secure financial footing, you expand your leverage," Stover says.

Successful franchisees often own more than one location to maximize their investments—they replicate their own process just as the franchisor replicates its own process, Stover explains.

Moore says some franchisees expand in a market then diversify. "It's easier. Companies are looking for experienced people to come in. Panera's (a bakery-cafe) will gladly take an Applebee's (a neighborhood full-service restaurant) franchisee because that person has the experience and the capitalization," she says, adding competing franchises won't be as eager. e