Franchising has attracted countless entrepreneurs in recent years due a wide variety of reasons. It offers many advantages over other business models, including training and support for franchisees, an established business model, turnkey-ready business units, strong brand name recognition, and multiple financing options. Overall, franchising is often seen as a great way for entrepreneurs to be their own boss, even if they have no prior business management experience!
But just how do you start your own business as a franchisee? While starting your own franchise business may seem complex at first, it can actually be much simpler than you think by just following a few basic steps. Let’s explore how to start franchising below in detail!
1. Do Your Research
First off, conduct thorough research on prospective franchises and ask yourself a number of key questions about how you envision yourself as a potential franchisee. What type of industries interest you the most? What can you raise for financing? What’s your timeline like for opening a franchise? What do you value as an entrepreneur?
Take your time to do your research, since your final decision on which franchise to choose is very important. In addition to looking online, try talking with current and former franchisees to see how they chose their franchisors and how they enjoy their current roles.
2. Apply and Attend a Franchise Discovery Day
The next step in how to start franchising is to apply and attend a franchise discovery day.
After narrowing down your options and choosing a franchisor, fill out and submit all the necessary application forms to them. Then, the franchisor will reach out to you and invite you to a franchise discovery day, a daylong event where you can learn more about the franchise in detail, meet key personnel, and take a closer look at if its the right franchise for you.
Franchise discovery days typically take place at a franchisor’s corporate headquarters and involve a mix of individual meetings, group presentations, and visits to nearby franchise locations. They’re a great opportunity to get answers for any remaining questions you have and to decide if you’d ultimately like to move forward with franchising.
3. Obtain Financing
Another key step in how to start franchising is finding financing for your franchise, which is crucial to do before officially signing any formal agreements.
Fortunately, there are many options for entrepreneurs seeking financing options for their franchise. Just a few choices typically include:
- Financing packages from the franchisor itself
- Tax-advantaged retirement accounts
- SBA loans
- Traditional bank loans
- Angel investors
4. Review and Sign a Franchise Agreement
If the franchise discovery day was a success and both you and the franchisor are still interested, you’ll next be presented with a franchise agreement, a formal contract between you and the franchisor.
Review the FDD and read the agreement itself carefully with an attorney and note your rights and responsibilities as a franchisee as well as what the franchisor itself has promised. Make especially careful note of items like royalty fees, estimated startup costs, territories, training and support programs, pricing, and transfer of ownership rights. If you’re confident with your decision to become a franchisee, sign the document.
Congrats! You’re one step closer to being your own boss.
5. Choose a Location
The next step in starting your own franchise business is to identify a location for it.
Franchisors can usually provide a lot of assistance in this area, but don’t forget to do your homework for it so you have a better understanding of the market. Some franchisors may be more strict than others when it comes to choosing a location, so be sure you’re on the same page with them before signing any official franchise agreements. Weighing whether to lease or buy a site outright is another important factor to consider.
6. Take the Franchise Training Classes
The final step in how to start franchising is to attend the training sessions sponsored by your franchisor. These usually last about 1 – 2 weeks and teach franchisees about operating their franchise unit on a daily basis, hiring staff, inventory, equipment, and employee training.
After that, it’s time for your franchise’s grand opening. Congratulations! You’re officially your own boss and the owner of a franchise.
Start a Franchise Business and Be Your Own Boss Today!
The first step in entrepreneurship is getting started. Don’t be intimidated by the process of starting your own franchise business. By understanding how to start franchising with these steps, you can take control of your career and finally be your own boss today!