How to start a franchise – Forbes Advisor

There are several steps to starting a franchise after you decide to pursue this business. From picking to getting a license to securing space, plan this process in advance to stick to the franchisor’s standards.

How to get a franchise in 8 steps:

1. Research franchises

You can find franchise opportunities on sites like Franchise Direct. It categorizes franchises by industry, work from home and lower costs.

These are the main points to keep in mind when choosing a franchise option:

  • Industry fees
  • Liquid capital is needed
  • Average monthly / annual turnover
  • Royalty fees
  • Marketing fees
  • Other fees

2. Evaluate opportunities

Before starting a franchise business, make sure there is not one already in the area. While there are some businesses that may exist in a city, such as Dunkin ‘Donuts, you want to make sure that you do not create a competitive location that can underperform.

3. Assess costs

When you are considering starting a franchise business, you need to be on top of a few different costs. In addition to regular business expenses such as rent and maintenance, you must pay an annual royalty to the franchisor.

Other costs include traveling, training with the company and paying some local taxes to start your business.

4. Prepare a business plan

Although many aspects of the business are already defined, you are responsible for the most important aspects of the business. When writing your business plan, you can outline why you would be a strong manager of the business.

It is also important to explain how you understand the community you want to serve with your location. You are the expert and it will be useful for the franchise in general.

5. Get the franchise license agreement

The franchisor has a contract that they deliver to franchisees to run the business. Before you sign, be sure to read it through and understand all the standards expected of your placement. It is important to know what business standards the franchisor has for franchisees, and make sure you are confident in maintaining the business.

6. Create a business unit

Once you’ve written your business plan, it’s time to form an LLC or a company to get started. Franchisors require different business units based on their overall structure. Either way, these companies mean you can start categorizing your business expenses.

7. Choose your first business area

Once you have the business operations in place, it’s time to look for a business headquarters. There are probably guidelines from the franchisor on what kind of space you should use in terms of size and setup. If it’s a restaurant, it’s probably also have specifications on appliances and facilities needed to keep the space in line with the overall brand.

8. Hire employees

Once you have your appointments and a location in place, you can start looking for employees. The franchisor has probably already created job descriptions and titles to make it easier to look up job openings and start looking for good employees. The franchise owners may also have an internal job posting system if there are employees at other franchise locations who want to relocate.

Bottom line

Starting a franchise business can be as much work as starting a business from scratch. Working with a franchisor gives you space to focus on important aspects of the business. The big picture is already complete.

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