You’re considering it, but once you start thinking of all of the unknowns, you may find yourself feeling overwhelmed, and you move on to something else. If this describes you, you’re not alone. You are just the person that this blog is dedicated to. We have laid out each step of franchise ownership for you, and the last one is the easiest.
1. Explore your options
The first step is the most fun, for this is where you get to explore and research all of the franchise opportunities out there. As you explore the many franchise opportunities out there, keep a tally of details so you can give a thorough comparison.
· What inspires you
Pick something you love and never work a day in your life.
What life and career experiences (if any) have prepared you for success? Is there any that you should seek out before buying a franchise? Keep in mind that many franchise opportunities include extensive training to prepare you for business.
There will be startup costs and ongoing costs that vary by each franchise opportunity.
· Support and training
Get an idea of the training and preparation to expect. You want to know the depth of training, where it is held, and how much it will cost.
· Local competition
This is called benchmarking. You want to know what other companies you will be competing against in your area. While you get that count, also analyze what makes them great, what customers say, and how much business they are doing in the area.
· Initial requirements
What exactly is the company looking for in a franchisee? Some are looking for specific prerequisites to ensure a successful transition.
Once your exploration is complete, you should be down to one or two opportunities for a deeper dive and first contact with the companies.
2. Make the first contacts
The next step is contacting your shortlist of candidates. The franchisors will have a questionnaire for you to complete so they can consider you as a potential franchisee. Not only are you looking for a perfect fit, but they are also.
The next thing to review on your first contact is the Franchise Disclosure Document (FDD), also known as the Uniform Franchise Offering Circular (UFOC). This document outlines the responsibilities of franchisees, required fees, and regulations to follow. Other vital information you’ll see is:
- Franchise size and 3-year (or more) growth trends
- Brand presence in your demographic area
- Leadership team and background
- Investment/fees/ongoing expenses
- Support provided (training, financing, etc.)
- Financial performance of the franchise
The Federal Trade Commission (FTC) requires franchisors to provide prospective franchisees with an FDD within 14 days before anything binding occurs, such as signed contracts or payments.
3. Meet and greet
The next step is to meet the franchisers. This step is known as a discovery day and typically happens at the corporate offices. You get to know each other, ask questions, and get a good feel for the company as a whole. While you are assessing your needs, they are appraising you for your level of commitment, enthusiasm, and leadership.
4. Review the franchise agreement
If your Discovery Day goes well, the franchisor will present you with a franchise agreement to review. This agreement grants you legal ownership to own and open a franchise under their regulations. Make sure to have a lawyer review the contract as well, and check for anything promised during your conversations in the Discovery Day.
5. Secure financing
Unless you have a significant amount of liquid savings, you will likely require some funding to complete your acquisition and secure all of the equipment, property, and other startup costs. Be sure to look into SBA loans as well as bank loans, and compare them to anything that the franchisor may offer.
6. Secure a location
Some franchises have already completed demographic studies for you for the optimal placement of your business. Some may even help you to negotiate a lease or purchase for your location and provide a list of details to look for.
7. Training and preparation
Now it’s time to learn all about your business and how to be successful. Your training may consist of a combination of hands-on training as an employee as well as a manager, along with classroom or e-learning instruction. Get as much as you can from this opportunity and as much reference material as you can carry home with you.
8. Prepare for launch
Promotion and marketing are at the center of this final step. The idea is to drum up interest and excitement from the community for your grand opening.
Better yet – get a franchise consultant – we make it easy
With a franchise consultant in your corner, you will never miss a critical step in your journey to franchise ownership. Hundred Acre Consulting is that consultant, and we partner with you through all eight of these steps and all of the sub-steps in-between. Your success is our success, at no cost to you. Are you ready to make 2020 the year of incredible strides? Contact us, and let’s start exploring in 2020!