Franchising has become a popular way to own and operate a business. After all, who wouldn’t want to be their own boss and have a proven business model to follow? But before you dive into franchising, it’s important that you understand the process and what’s involved.
If you’re thinking about owning a franchise, there are a few things you should know. Here is an overview of the franchising process:
Steps You Have To Follow To Own A Franchise
1. Find The Ideal Franchise
The first step is finding the right franchise for you. There are many different franchises to choose from, so it’s important that you take the time to find one that’s a good fit for your interests, skills, and budget.
Food franchises are some of the most popular options, but there are also plenty of other types of businesses you can franchise, such as retail stores, service providers, and more.
Some factors you should consider when finding the ideal franchise include the following:
- The Franchisor’s Reputation: You want to associate yourself with a franchisor that has a good reputation. Do some research online and see what others are saying about the franchisor and the franchise opportunity.
- The Franchisee’s Success Rate: It’s also important to find out how successful other franchisees have been. Ask the franchisor for some references and talk to other franchisees to see how they’re doing.
- The Franchise Fee: There is usually a franchise fee associated with becoming a franchisee. This fee can range from a few thousand dollars to several hundred thousand, so you need to make sure you can afford it.
- The Term of the Agreement: Franchises are typically granted for a term of 10 years, with the option to renew. Make sure you’re comfortable with the length of the agreement before you sign anything.
2. Apply To The Franchise
Once you’ve found the right franchise, the next step is to fill out an application. The franchisor will use this application to determine if you’re a good fit for their franchise.
Some of the things they may look at include your financial history, business experience, and why you want to own a franchise. They’ll also likely conduct a background check, so unless you have something to hide, there’s no need to worry.
Going over the Franchise Disclosure Documents (FDD) is also important at this stage. The FDD is a legal document that outlines the franchise agreement and what you can expect as a franchisee.
It’s important that you take the time to read and understand the FDD before moving forward with the franchising process. If you have any questions, be sure to ask the franchisor for clarification.
3. Attend Training
After you’ve been approved as a franchisee, the next step is to attend training. This training will teach you everything you need to know about operating your franchise, including how to use the franchisor’s systems and procedures.
Some franchises also require that you attend regular webinars or conferences to stay up-to-date on best practices. You can expect these training sessions and webinars to include the following:
- Visits to successful franchise locations
- One-on-one meetings, group discussions, and role-playing
- Information about the franchisor’s marketing campaigns and how you can participate
- Updates on new products, services, and procedures
4. Fund Your Franchise
The next step is to fund your franchise. This usually involves taking out a loan, although some franchisors may offer financing options. According to studies, over half of all franchise opportunities require an initial investment of $250,000 or more.
If you need to take out a loan, be sure to shop around and compare rates from different lenders. You should also look into SBA loans, which are specifically designed for small businesses, including franchises.
Unfortunately, if you have bad credit, funding your franchise could be a challenge. In this case, you may need to look for alternative financing options, such as private investors or grants.
5. Register Your Franchise
Depending on the state you’re in, you may need to register your franchise before you can start doing business. The process for registering a franchise varies from state to state, so be sure to check with your local government for specific requirements.
A dilemma that some franchisees face is whether to register their business as an LLC or an S-corp. If you’re not sure which option is best for you, it’s a good idea to speak with an accountant or attorney.
Generally, though, LLCs are simpler and more flexible, while S-corps offer certain tax benefits.
6. Open for Business!
After registering your franchise and obtaining all the necessary licenses, it’s time to open for business! This is usually a pretty exciting time, although it can also be a bit stressful since it involves leasing space, hiring employees, and stocking your shelves with inventory.
When leasing a space, be sure to pay attention to the details of the lease agreement. You don’t want to get stuck in a long-term lease for a space that’s not right for your business.
As for hiring employees, look for individuals who share your vision and are passionate about giving customers the best possible experience.
Some franchisors may also require that you attend a grand opening event or promotional campaign. These events are a great way to generate buzz and get people in the door.
7. Start Generating Leads
The final step is to start generating leads. This usually involves marketing your franchise to potential customers in your target market. After all, if people don’t know you exist, they can’t become customers!
There are several different marketing strategies you can use, including:
- Social Media Marketing: Use social media platforms, such as Facebook and Twitter, to reach potential customers. Be sure to post engaging content that will pique people’s interest and encourage them to learn more about your franchise.
- Email Marketing: Send out periodic email newsletters to people who have signed up for your mailing list. Include special offers, coupons, and other types of content that will encourage people to do business with you.
- Print Advertising: Place ads in local newspapers, magazines, and other print publications. This is a great way to reach people who may not be active on social media.
No matter which marketing strategies you use, the important thing is to be creative and think outside the box. Make your target audience feel like your franchise is the solution to their problem.
Wrapping Up
Owning a franchise is a profitable way to start your own business. But before you jump in, there are a few things you need to do to set yourself up for success. The steps outlined above will help you get started on the right foot.
Amit Gupta is the founder of DrFranchises – a digital marketing agency that helps brands rank better on Google Maps through local SEO strategies. Amit has over 11 years of experience in digital marketing, SEO, email marketing, and social media marketing. He’s also the owner of multiple franchises and has helped countless brands achieve success online. When he’s not working, Amit can be found playing with his dog.