After deciding to pursue this business, there are several steps to starting a franchise. From picking to obtaining licenses to securing space, this process must be planned in advance to follow the franchisor's standards.
Here's how to win a franchise in 8 steps.
1. Research franchise
You can find franchise opportunities on websites like Franchise Direct. We categorize franchises by industry, work-from-home, and low-cost franchises.
Here are some key points to keep in mind when choosing a franchise opportunity:
- industry fees
- Need liquid capital
- Average monthly/annual revenue
- royalty fee
- marketing fee
- Other charges
2. Evaluate the opportunity
Before starting a franchise business, you should check to see if a franchise business already exists in your area. There are some businesses, such as Dunkin Donuts, that can exist throughout a city, but care must be taken to avoid establishing competitive locations that may underperform.
3. Cost evaluation
If you are considering starting a franchise business, there are several different costs to consider. In addition to regular business expenses such as rent and maintenance, you must pay royalties to the franchisor annually.
Other costs include travel expenses, company training, and paying local taxes to start your business.
4. Drafting a business plan
Many aspects of the business are already defined, but you will be responsible for the most important aspects of the business. When you write a business plan, you can explain why you will be a strong manager for your business.
It's also important to explain your location and how you understand the community you want to serve. You are an expert and will be helpful to the entire franchise.
5. Obtain a franchise license agreement
The franchisor has a contract to provide the franchisee with which to operate the business. Be sure to read and understand all expected standards in your area before signing. It's important to find out what business standards your franchisor has for its franchisees to see if you feel comfortable keeping the business.
6. Formation of business entity
Once you have created your business plan, you can start your business by forming an LLC or corporation. Franchisors require different business entities based on their overall structure. Either way, it means these businesses can start categorizing their business expenses.
7. Choose your first business space
Once you have your business operations in place, look for a business headquarters. There will likely be guidelines from your franchisor as to what kind of space you need in terms of size and setup. A restaurant might also have specifications for the appliances and amenities needed to keep the space consistent with the overall brand.
8. Hire employees
Once you've decided on a contract and location, you can start looking for employees. Your franchisor will likely already have job descriptions and job titles in place, making it easier to post job openings and start looking for quality employees. Franchise owners may also have internal recruiting systems in place in case employees wish to transfer to other franchise locations.
conclusion
Starting a franchise business is just as hard as starting a business from scratch. Working with a franchisor gives you the space to focus on the important aspects of your business. The big picture is already complete.
