The decision to invest in a franchise business is life-changing. But, it can be intimidating not knowing all the steps involved in getting to opening day. From finding a lucrative industry to hiring the right people, a lot goes into setting yourself up for success.
Start by researching and looking at different opportunities like fast food, gyms, or pet franchises. Consider your interests and what types are successful and in demand in your area. You may even want to talk to a few franchise owners to get their views on efficiently operating a business. Remember, there are lots of options out there. All you need to do is find the right one for you.
Here is what you need to know about how to get started in business franchising:
1. Research
Understand the challenges of running a specific location. A low-traffic area could pose a challenge, for example. A franchisor likely has a reason for recommending certain locations. In some cases, a franchisor might allow you to bring in a location and consider it. Research the opportunity and understand what you’re walking into. Even for the right business, the wrong location can sink it before you even really get the franchise off the ground.
Don’t hesitate to have an in-depth meeting with a franchisor. Let them present to you what support they’d offer to a franchisee and ask questions. Gather information on what sort of expectation should be set by both you and them regarding how a franchise is to operate. Some franchisors may even offer to connect you with existing franchisees. If they do, this is yet another opportunity to gather more information.
2. Franchise Agreement
A franchise agreement is often not what a lot of first-time aspiring franchisees think it is. A franchisee can break an agreement if they do not follow its terms. Furthermore, after the agreement expires, there is no entitlement to the brand or the business you’ve built. Though a franchisor may not choose to, they can remove you as ‘franchisee’ without repercussion in a lot of cases after your term is done. Look carefully at what you’re signing and understand the advantages or disadvantages.
A franchise lawyer can help look over the franchise agreement. If there are things you’re uncomfortable with or want to negotiate, a franchise lawyer can help. At the very least, consult with a franchise lawyer. They will be able to give you accurate insight into what’s fair in any franchise agreement. There may be no room for negotiation. This isn’t necessarily a bad thing in the world of business franchising. Regardless, know your rights and what you’re entitled to in a franchise agreement.
3. Secure Your Finances
Every business franchising has a buy-in. Know what that number is and what comes with it. Next, secure funding. You may go to your bank, try to secure a small business finance loan, or look at the lending programs possibly available to you at a federal or provincial level. In addition to the upfront investment, you will also want to have enough in your reserves to cover all business expenses until the point to which the business franchising is profitable. It’s not uncommon for the process to take months.
4. Permits & Insurance
Your business franchising may be willing to help with this part of the process. Depending on the type of business franchising you have, you may be required to get certain permits and insurance. Understand everything that there is to know about being compliant with any regulations attached to your industry. For example, a restaurant franchisee does not want to be deemed in violation of cleanliness regulations. Be very careful with this and ensure all laws are followed at all times.
5. Staff Members
Take an honest look at yourself. As a business franchising, you will be at work for long hours and constantly at work on various things. You may not have all the skills to excel at everything. That’s perfectly normal. As a franchisee, you can hire staff members to help with certain tasks and specialties.
Here comes your first test as a franchise owner: hiring and training employees. A franchisor generally has a specific training method they want followed. Adhere to it. A franchisee is expected to stick with the systems introduced by the franchisor without any variance. You will want to be careful in who you hire. Ensure everyone is fully trained from the get-go and receiving support throughout their tenure with you.
6. Business Franchising Opening
Your first day open will require various marketing strategies to be put in place. Use a mix of offline marketing, digital marketing, social media, inventory and supply chain setup, and brick-and-mortar technology setups, and more. On your first day, you should be ready to hit the ground running and start the push towards profitability.
