Opening a franchise can be a great journey if you’re looking to start your own business or a career change. You can join an established company with strong branding while still getting to hold the reins and run the location yourself.
Starting a franchise means that you are running a business that is supported by a larger, already successful company. Finding information on how to start a franchise in your city is key, as franchising can come with many of the same challenges as starting a new business.
Step One: Determine Your Budget
In addition to startup costs, there is an upfront franchise fee, which can range anywhere in the ten to fifty-thousands. Like a bank would when you’re starting a new business, franchisors will evaluate your financial background and personal assets. Find out how much the upfront fee will be to see if you are able to pay or take out that loan amount for the initial costs. Some franchisors require a minimum net worth, so asking before applying can save you time.
Step Two: Do Your Research
If you’re unsure about which company to join, or what franchise you can open in your area, it’s good to research your options first. Franchise opportunities can be plentiful, but you should see what is available before you contact the company.
In addition to inquiring about the franchise fees, you should get as much information as possible from the franchisors and other franchisees. Ask what the history of the company is, the future of the brand, and what the daily operations entail. Finding out if you would be a good fit, and if the franchise is a good fit for you, is invaluable information to have before starting a franchise.
Ask for statistical data about the franchise's operations and find out the kinds of training, marketing and operational support the franchise representative can offer you.
Step Three: Make a Business Plan
Once you’re armed with data and information, you can craft a business plan to present to the franchisors during the official interview and vetting process. This can be as detailed and forward-thinking as you prefer, but make sure to be thorough in your plans to keep the company name strong while running operations in your specific area, and any challenges you might face--with solutions to those issues as well.
Step Four: Raise Capital and Make Your Investment
Whether you are investing your own money, applying for a business loan, or looking for an investor, your startup costs will need to cover the franchise fee and other operational costs, like equipment or cleaning services. Make sure your loan or investment amount is enough to cover these costs upfront.
Step Five: Sign Your Franchise Agreement
Once you have your ducks in a row, you can sign the franchise agreement with the owner. You’ll want a legal expert to review the final document, and make sure it answers all your questions.
Once your agreement is signed, you can get started with training and operations for your new franchise. With the support of a larger corporation, opening a franchise can be a solid alternative to starting your own business!