How to Open a Franchise: The Franchise Process
Franchising is a great option for people with an entrepreneurial spirit that would flourish with the support provided by an experienced franchisor. If you’re wondering how to open a franchise, there are a few steps involved.
Be sure that buying a franchise is right for your personality – do you appreciate structure and can you implement plans? Identify the type of franchise you’d like to buy, keeping in mind the necessary strengths a franchise owner in that industry will require. If you want to open a franchise where interpersonal skills are a must and you prefer not to work with people – that may not be a good fit.
There are many investment levels and industries. You might want to delve into research on a few opportunities when buying a franchise, take your time and do your homework! Take a look at “A Consumer’s Guide to Buying a Franchise”, published by the Federal Trade Commission.
Once you’ve contacted the franchisors you’re interested in, you can expect to hear back from the franchise development team that will want to get to know you better. You’ll be asked about your goals, financial and educational background, as well as previous business experience. The relationship between franchisor and franchisee is important, so it’s important that the franchise you choose can help you open a franchise as well as succeed in the long-term.
The franchise recruiter will discuss operating territory with you to ensure that when you open a franchise, it will be in a viable area. Next, you may have the opportunity to speak with support team members via conference call before being invited to a Discovery Day to meet the support and marketing team in person. When buying a franchise, you’re committing to that franchise’s ethos and business model, so make sure you understand the support you’ll be receiving, and the expectations the franchisor has of franchisees.
Time to Get Down to Buying a Franchise
Assuming that the Discovery Day goes well and you’re ready to open a franchise, read the Franchise Disclosure Document and the Franchise Agreement. You’ll then sign and return the agreement to the franchisor, and they will send a counter-signed copy back to you.
Whey buying a franchise you should factor in not just the franchise fee, but also the cost of equipment, marketing investment, and overhead. Make sure you have the capital to cover business and personal expenses for approximately six months to a year.
Depending on the franchisor, the pre-opening tasks may take a few weeks before you receive training and are ready to open. The most desirable training will take place on-site at your location. Your franchisor should then offer support in all areas of the business for an unlimited period, on an unlimited basis. For example, the marketing team should be there to help guide you in the creation of a marketing plan that encompasses a variety of potential sources, from online to local efforts. An effective team will be able to provide customized artwork for your location’s needs, as well as provisioning a standard set of marketing pieces during the start-up phase. The support and operations team will have many years of experience working with franchisees, and be able to use that experience to help you avoid costly and/or time consuming mistakes.