7 Steps to Take Before Starting Your Own Franchise

January 5, 2019

A franchise can be a very lucrative business. Investors have a ready market, identifiable name brand and many tools at their disposal. This can make it easy to get the business off the ground and see results quickly. It is important for any potential investor to understand the process and what they can expect. These easy franchising steps help assure any owner has the right franchise for their specific plans.

Research and Paperwork are Crucial

It’s important have a thorough look at any franchise in great detail. Read the brochures. Examine all available franchising literature. Treat this as a job description and remember that upwards of sixty plus hours a week may be required to make it a success. You will need to submit detailed paperwork about your assets and other qualifications before you begin. Franchise owners want to see that you have what it takes to meet their standards and meet the company’s brand expectations. A franchise owner will expect to see that you have been involved in other, previously successful business ventures.

Disclosure Documents and Questions

Government laws require the franchise to provide financial details about the company in advance. These franchising documents should be read closely. These franchising documents may be upwards of fifty pages. It’s a good idea to have an attorney have a look at them. The franchise owner or anyone in charge of vetting people typically requires an in person meeting with all applicants. Now is the time to have any questions answered. It’s a good idea to come to the meeting with a list of specific concerns about the documentation provided. Any interviewer should be able to answer questions about all aspects of the franchise including total annual revenues, the amount of money required for the initial investment and any kind of ongoing expenses.

Narrowing Down the Choices

Now is the time to investigate all possible franchise options in person. Visit at least two locations. Note details such as the cleanliness of the location. Visit at varied times including when the store first opens as well as rush hour. Sample many items on the menu and see how they are prepared. The ideal franchise is one that the investor can embrace wholeheartedly with true belief in the end product.

Related: Setting Up A Franchise Business – Choosing the Right Business Structure

Contact Other Franchise Owners

Now is the time to speak closely with others who have already invested in this franchise. Ask the company for a list of fellow investors. If this is not possible, it’s always possible to go online and look for message boards and other social media outlets devoted to the idea of investing in a franchise. People who have taken this step can share the benefits and the challenges of owning a franchise.

Lining Up Financing

In some instances, an investor may have cash on hand that is available for immediate investment in the franchise. In that case, making sure it is liquid and ready for the franchise owner is best. In some instances, the investor may need to have a source of funding. An investor may have a down payment but not the entire sum. The investor should make sure they have all the money they need to open the business before they begin.

Related: Running Your First Franchise

Picking a Location

Sometimes, a franchise already has a list of potential locations. If this is the case, it is extremely important to decide which one is right. In other circumstances, the investor is the one who must find the location and begin to develop the site. A franchise may not allow a potential competitor to open up a new outlet within a certain distance from an already existing location. Keep in mind that opening up a franchise will typically require working closely with the local planning board. An investor needs permits in place before they can move forward

Hiring Staff and Opening Day

After this process is completed, it’s time to find staffers and begin the process of working towards opening day. Many franchises have guidelines that help people find qualified and enthusiastic staffers ready to work on day one. It’s important to understand exactly how to hire people. Specific requirements may apply such as age groups, the ability to legally work and an applicant’s previous experience in the industry. All these factors, when properly done, will make any franchise a worthwhile investment.

Brittany Waddell is a contributing writer and media specialist for East Coast Wings. She often produces content for a variety of franchise blogs.