Starting a franchise involves in-depth planning, conducting researches, and preparing finances. Franchising is not for everyone but anyone can begin to start a franchise.
Franchises are considered licenses which a franchisee acquires to be allowed access to a franchisor’s business, knowledge, processes, name, and trademarks. When starting a franchise, the franchisee often pays the franchisor start-up and other fees. Franchising is a popular method to begin a business in whatever industry desired be it food, health, or service.
Why consider starting a franchise?
Statistics suggest that every eight minutes, there is an estimated one franchise that opens in the United States. It is also a fact that the franchising industry contributes up to 40% of all retail sales in America.
A lot of people are starting a franchise for a lot of reasons. Here are the top three reasons why it is a good business move.
- A company open for franchising has a tried and tested method of doing business. Hence, you are sure that its method produces successful results.
- Franchising companies have staff members who provide assistance to franchisees. Hence, you will have ongoing operational support from the time you are starting until your business has become stable.
- Starting one has lesser risks than opening your own business.
Steps of starting a franchise
Although having your own franchise may look as if it involves only two steps, pay and open, starting a franchise involves other things. To start a franchise, you have to choose the right franchise, impress the franchisor, negotiate with him, and finance the franchise.
- Choosing the appropriate franchise.
When starting, you have to make sure that you love what you will sell. Determine what you are fond of. Do you like food or are you more of a service-oriented individual? Starting a franchise is an investment of both time and money. You have to be sure that you can and will be willing to be hands-on in your business especially in its first weeks of operation.
- Making an impression with the franchisor.
Starting a franchise involves competing with other possible franchisees. To make sure that you will be approved, research about the company you want to franchise. Give your best foot forward during the interview.
- Negotiate wisely.
Once your proposal to franchise has been approved, the next step is to starting a franchise is to negotiate with the franchisor. Here, you will draft a contract. Include the terms of franchise such as period, area requirements, operation assistance, among other things, and the specific amount of fees. Consult an attorney as regards the contract to ensure that it is within the bounds of law and fairness.
- Financing the business.
Starting a franchise definitely involves millions of finances. As franchisee, you must shoulder all startup costs. Prepare these, as early as possible.