Starting your franchise is an excellent step on the path toward financial freedom and more time flexibility. Whether you have always had your sights set on a specific franchise or if you are open to various opportunities, there are a few tips to keep in mind throughout your journey to opening a new franchise of your own.
Evaluate Your Goals
The first step to take when you intend on investing in a franchise is to evaluate your goals and begin creating a business plan. With a business plan, you’ll move forward with a better understanding of the financial elements involved in planning and owning a franchise.
Spend time calculating the costs of various franchises you’re interested in and compare different locations near you that are already available. Consider the total amount of money you will need to get your franchise off the ground and how much you already have available to invest out of your pocket.
Brainstorming is essential when crafting your business plan. Evaluate both short and long-term goals involving the projects you have in mind for your future franchise.
Consider Working with a Mentor or Advisor
One way to dive into the franchise industry is to do so with the help of a professional guide or mentor.
It would help if you also considered seeking out a franchise advisor to help you get started. Working with a franchise advisor is not only a way for you to discover more about how the process of buying and managing a franchise works, but it’s an excellent opportunity to learn more about other franchises that are currently growing or are on the rise too.
Research Your Preferred Industries
Research your preferred franchises, their startup costs, their maintenance costs, as well as various franchise locations that are in your current area or the area you intend to invest in. The more familiar you become with the franchises you are interested in, the easier it will become to make a decision that will likely result in the most profit and growth potential.
Getting involved with the franchise community, both locally and online, is highly advisable for anyone interested in owning their franchise.
Join online forums, message boards, communities, and even social media groups that are optimal for franchise owners or those interested in the franchising industry. Joining online groups and communities is one of the quickest ways to seek out guides, resources and even gain professional input and opinions from those who have experience as franchise owners or investors.
Once you’ve formed a personal community of franchise owners, you will begin to feel more comfortable asking questions and navigating the process of choosing the right franchise for you, and securing the funding you require to get started.
Get to Know Other Franchisees
But online isn’t the way you should be cultivating your franchise community. Spending time with other franchise owners and learning about the industries you are most interested in investing in personally will provide you with valuable insight into the ins and outs of owning and managing successful franchises. Attend networking conferences and events to learn more about franchise owners in your local area or in the area and region you intend to build your franchise in.
Getting to know other franchisees can provide you with invaluable information about managing specific franchises you are interested in yourself. Not only is networking ideal for business advice and guidance, but it can also provide you with the connections you need for future marketing, growth, and expansion opportunities once you become a franchisee.
Attend a Franchise Discovery Day
One way to learn even more about specific franchises you are interested in as investments is to attend a franchise Discovery Day. Discovery Days are designed to welcome individuals who are seriously thinking of investing in a franchise of their own and want to learn more. Franchise Discovery Days typically involve potential franchisees meeting with the franchisor at the franchise’s corporate office to learn more information about the investment. And nowadays, Discovery Days can be digital.
During a franchise Discovery Day, you will have the opportunity to ask questions. At the same time, you gain in-depth knowledge of how the franchise you are interested in is managed and maintained. You will also learn more about staff, personnel, and specific procedures required and involved in the process of owning and operating the particular franchise you are considering.
Finding a Location
Like any other business, the location of a franchise is a significant factor in whether it will be successful. Choosing the right location for your franchise investment is one of the most important decisions you will make as an investor and as a new business owner. It’s essential to take your time in researching locations in the various areas or regions you’re most interested in.
Are the locations you’re interested in for your franchise already overcrowded, or are they optimal for long-term investments? Compare the current franchises and comparable businesses in the locations you are thinking of? Will your new investment be faced with more competition than it can handle, or is there an opportunity to rake in the profits due to a lack of other similar franchise locations in the area?
A franchisor will help its new franchise owners find an ideal location for their business in many cases. In some instances, it’s required for the franchisee to submit their intended location for franchisor approval. Before choosing a franchise, be sure to check how much autonomy you have when selecting your franchise’s location. Be honest with yourself about whether control over location is important to you or not.
Secure Your Funding
Securing the funding of your franchise is a big step forward into owning and operating your very own franchise business.
Once you have officially secured the funding for your franchise, you can more easily move forward with signing contracts, building your franchise, ordering supplies, and hiring staff. Some of the most common methods used to secure funding for those starting a franchise include the following:
- SBA (Small Business Association) Loans: Taking out an SBA loan is a great way to obtain and secure the funding you need for those who qualify.
- Traditional Loans: You may have the ability to secure traditional loans from banks and other financial institutions if you qualify.
- HELOC: A Home Equity Line of Credit may be available to you if you are a homeowner that qualifies.
- Angel Investor: Seeking out an angel investor (someone who gives money to a startup business, usually in exchange for equity in the business) may be possible with unique plans and ideas about the franchise business plan you have in mind.
It is also important to consider how much funding you need for your franchise until you generate a profit. Profit often isn’t immediate. Most franchises require some time before they begin to turn a profit. It’s essential not to forget this aspect when seeking out and secure funding for a loan or an angel investor.
Sign Your Franchise Agreement
Once you have secured the funding necessary for your new franchise investment and you have chosen a suitable location, it’s time to sign the contract or franchise agreement. Most franchise agreements are extremely rigid and include specific requirements, fees, and other expenses.
It’s advisable to consult with an attorney before signing the agreement and finalizing all terms and conditions. Working with an attorney who knows the ins and outs of franchising is a way to understand the requirements better, regardless of the type of franchise you have chosen to invest in.
But keep in mind, while some franchisors may be extremely strict with their agreements and contractors, others may be open to negotiations depending on your needs. A franchise attorney can help you find the areas available for changes that could benefit you.
Successful franchises are built on the foundations of repeatable processes. To become and remain successful as a franchise owner, following the guidelines, rules, and contractual agreements are always necessary.
Insurance, Permits, and Paperwork
After signing the official franchise agreement, you will then complete any additional paperwork involved in the process of obtaining a new franchise and assuming responsibility for the franchise and the location you have chosen.
You will also need to obtain any additional permits and insurance that are required for you to own, operate, and open your franchise. The laws and regulations about permits and insurance required to own and operate a franchise will vary based on your city, state, and even specific zoning areas you are interested in using. Consult with your franchisor to determine the best course of action to take to ensure that you have all the proper licensing, insurance, permits, and paperwork in place before you open your franchise to the public.
Staff and Training Procedures
Review staff and training procedures with your franchisor before you begin hosting your own training sessions or acquiring the training materials you need. One of the advantages of investing in a franchise operation is utilising a variety of ready and on-demand materials whenever you need to hire new employees, train staff members, or even order supplies.
All the contact information for vendors, staff, employees, HR and other personnel are provided to all franchisees who are preparing to open their franchise for the first time. Take the time to familiarise yourself with various training procedures involved in your franchise as well as staff training requirements before you begin interviewing and hiring individuals who are interested in working for you and becoming employees. The more familiar you become with managing and staffing your franchise, the less stressful and overwhelmed you are likely to feel once the big launch day of your franchise arrives.
Prepare to Open Your Franchise
Preparing to open your franchise may include both online and offline marketing strategies, depending on the type of customer you want to reach and the demographics you intend to appeal to with your franchise’s products. Consider the marketing budget you have available and the age range, gender, and location of those you want to reach. Which platforms and marketing materials are customers most likely to view and use to discover new franchises that offer products or services like your own?
Some of the most common marketing methods used to promote franchises today include the following:
- Television Ads
- Radio Advertisements and Commercials
- Newspaper Listings, Promotions, and Advertisements
- Social Media Marketing Campaigns
- Email Newsletters
- Blogs and Official Websites
- Direct Mailer Promotional Materials or Coupons
Consult with your franchisor to determine what type of online presence you are permitted to create for your franchise. Many franchisors have strict guidelines and rules for individuals interested in promoting franchises locally and online.
There may also be specific grand opening promotional requirements based on the franchisor’s experience. You may also be required to invest in specific marketing and promotional material depending on the rules and guidelines included in your franchise agreement with any new marketing campaign or strategy you launch.
While starting a franchise isn’t always simple nor an overnight process, it can be extremely rewarding for those who are truly dedicated and committed to creating a success out of their investment.
With an understanding of the franchising business and industry and with a plan in place, you can open your franchise feeling comfortable with and confident in each decision you make as a new franchisee.
Source: Franchise direct