1. Show your passion. Explain to the franchisor why you’ve chosen their network and why you’re the right person to represent the brand and its franchise model.
This is particularly important if you have no professional experience in the franchisor’s industry, or no prior experience of starting a business or running a business.
While some franchisors will have more specific requirements, others are just looking for enthusiastic, business-savvy individuals that can motivate a team and are willing to put the hours in to make their franchise a success.
2. Show off your business acumen
When advertising a new franchise business opportunity, franchisors will look for candidates with excellent managerial skills and the ability to steer a business through challenging times. If you have experience in running a business, show the franchisor how you coped during the most difficult times.
Another part of being a great business leader is having the ability to communicate and network with other business owners and share insights.
Indeed, many franchisors provide opportunities for franchisees to meet one another and exchange ideas, often through conferences, training days, awards ceremonies or other special events.
Therefore, tell the franchisor how you’ll make the most of these opportunities and learn from your fellow franchisees.
3. Be clear that you’re in this for the long haul
Few successful franchisees would disagree with the fact that starting a franchise business is one of the most important decisions you’ll make in your life.
So, you’ll need to convince the franchisor that you’ll devote as many hours as possible to your business until the contract expires.
Tell the franchisor why you want to open the franchise and what your long-term goals are. For example, some franchisees plan to grow their franchise to maximise its value before putting it up for resale at the end of the contract to fund their retirement or another business venture.
4. Create a comprehensive business plan
Give yourself plenty of time to create a plan for your franchise business opportunity, which should include detailed information on how you will finance and run the business, and what your personal goals are.
Some franchisors may provide a free financial template for you to work with, although you can also find numerous free templates online, as well as financial forecasting/modelling software at minimal cost. As always, it’s important not to overestimate your projected revenue/profits.
Your plan will be scrutinised by the bank if you intend to take out a loan to finance part of your investment for starting a franchise business.
Remember that being a franchisee is not the same as running your own business, as you’ll still need to conform to the franchisor’s guidelines and business model. However, as a franchise owner and operator, franchisees can often enjoy running their businesses with little interference from the head office.
5. Make sure you have enough working capital for those crucial first few months
Determine how much working capital you will need to finance your new franchise and its day-to-day operations.
As your business grows, you’ll need more working capital to meet demand, and this could catch you out if your franchise grows much faster than you expected.
Related: Running Your First Franchise
In the short term, without enough funding, you may experience cash flow problems; even if your sales are very high.
So, make sure you don’t underestimate how much working capital you’ll need when starting a franchise business. This will depend on your individual circumstances, the industry, the franchise fee, rent, and external factors such as the economy.
6. If you’re choosing the location, research very carefully
No matter how great the franchise model is, if the location isn’t right, the business will more than likely fail.
If the franchisor allows you to select the location yourself, choose a site where there’s sufficient footfall, but not too much competition.
Fortunately, many franchisors can provide you with special criteria to look out for when you research a site for a franchise business opportunity, which could include anything from population density to age demographics.
It’s also worth considering whether there is an exclusivity clause in the contract, which will prevent another franchise of the same network from setting up a unit within a specified area.
Bear in mind that many franchises in sectors like finance and IT can also be run online from home which would save you from having to commute and pay high office rent, while gaining the benefits of flexible working.