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Choosing to open a franchise is no mean feat. A lot of money, time, and effort goes into the franchise management process—especially in the beginning when you’re just learning how to start a franchise. Therefore, the most successful franchisees have an independent personality, stellar leadership skills, and lots of determination. They also have a plan. In this guide, we’ll cover the various franchise process steps you need to take to set yourself up for success.
Before jumping into any decision, it’s critical that you conduct a thorough investigation of your franchising options and develop a complete understanding of the franchising process. To help get you started, this section will review the different types of franchises, discuss the ups and downs of franchising, and list a few of the most popular options.
We know you don’t want to make this decision on a whim, which is why we want to help offer support where we can. If you’re conflicted, there are resources available to guide your decision. For example, we’ve created a self-survey to determine if your personality and needs fit in with the franchise lifestyle.
Speaking generally, there are three basic types of franchise organizations that you can choose from:
In this model, the franchise hand-delivers the product to the franchisee without the franchisee needing to make anything themselves. The only requirement on your end would be to sell the product. In this franchising model, the franchisor allows you to use its products, logo, and trademark but the format for actually running your business and sales process is left up to you. Here are a few examples of the product distribution model:
Different from product distribution franchising, the business format model provides you with a standardized business model to follow. The parent company (franchisor) dictates how you operate your business to properly provide their services, while you independently manage day-to-day operations. This means that your goal is to make sure all of your processes and daily operations consistently represent the parent company’s brand standards. This model often works best when selling services instead of individual products. Here are some examples of business format franchises:
If you are passionate about philanthropy or social advocacy, then this model of franchising is likely to be a good fit for you. Social franchises are companies who focus on delivering life-sustaining services and products to people who are financially disadvantaged. The social franchising model itself mimics the structure of the business format franchising but focuses on delivering basic-need services like:
Within these three general franchise models, there are thousands of brands for you to choose from. This can be quite overwhelming at first, so it’s important to stick to some guidelines as you review your options:
Now that we’ve discussed the different basic types of franchises, let’s take a look at some of the top franchise brands available on our website to purchase today.
If you are a fashion-forward individual with a passion for apparel, then Apricot Lane would be a great franchise to pursue. Known for bringing in all the latest trends much faster than their competitors, Apricot Lane has already cultivated a band of loyal customers.
Passionate about alternative energy and helping the planet? If so, you should consider the solar power business. With a Solar Grid franchise, you’d be joining a thriving enterprise. In fact, the solar power industry is experiencing a record-breaking annual growth rate of 48%—and is projected to account for half of renewable energy generation by 2050.
Want to turn your dog training experience into a profitable business? Then buying a Zoom Room franchise is your answer. This venture-backed indoor dog training gym focuses on educating and “training” dog owners to help their pets have the time of their lives.
If helping people by operating a business is one of your life goals, then you should look into 911 Restoration. 911 Restoration is a disaster restoration company that strives to make lives better by providing water and fire damage restoration services.
As you can see, the possibilities are endless when it comes to choosing a franchise. No matter what your skills are or what you’re passionate about, there’s a franchise for you. You can explore all of your options on our website. Realizing your dream of owning a business could be just a few clicks away.
Once you’ve determined if franchising is the right path for you and you’ve narrowed down your options, it’s time to review the individual legal, financial, business, and personal requirements associated with buying a franchise.
When going through the franchise purchasing process, you will encounter many complex legal documents. Therefore, you will need to consult with a franchise attorney, your personal attorney, and your personal accountant before signing any official paperwork or finalizing any decision. Through these legal proceedings, your attorney, the corporate franchise attorney, and your accountant will review the following two main franchising legal documents:
We should note that this is a very brief overview; to learn more about the specifics of franchise legal processes, you should review our comprehensive resource.
How much money do you need to start a franchise? Of course this varies from franchise to franchise, but many standard costs are incurred throughout the franchise life cycle. Here is what you should plan to pay for:
The franchise fee is the up-front licensing fee you pay to establish and maintain your relationship with your parent company’s brand. Once you pay this fee, you’re on your way to becoming a member of that franchise’s business family. The fee amount typically ranges anywhere from $20,000 to $50,000. You can think of it this way, the cost of your franchise fee really depends on the type of franchise, and how established the franchise parent company is.
Since a franchise opportunity branches off of the parent company’s original business model and idea, you are required to pay royalties out of your gross monthly earnings. The exact amount you need to pay will be outlined in your franchise agreement. This looks different for each franchise, so it’s important to ask questions and conduct your own research before getting too far along in the purchase process.
One of the most time and cost intensive aspects of owning a franchise is the development of your location. The exact cost of creating your storefront depends on a number of factors including:
As a franchise owner you are responsible for recruiting and maintaining your workforce. As with all of these costs, the specific hiring amounts vary greatly from franchise to franchise. However, it is standard procedure that payroll service costs are outlined in the franchise disclosure document (FDD).
The cost of supplies can be extensive, depending on the industry of your franchise. For example, in the restaurant industry the cost of ingredients, kitchen, and dining supplies can add up quickly. However, if you enter into a vending machine franchise, the inventory costs are likely to be less expensive, but the overall profit you make on an individual purchase will be smaller compared to a restaurant.
To ensure that you’re organized and ready to run your franchise business, it’s a best practice to create a business plan. This plan will outline expectations and prepare for potential challenges. However, every franchise business plan looks different. For example, a business plan for a franchise restaurant looks completely different compared to a business plan for a flower shop. However, a few basic steps are involved when you’re learning how to create a franchise business plan:
Owning a franchise business requires you to learn and grow on a personal level as well. After your franchise agreement has been signed and your relationship with the franchise has been established, you will go through extensive training at the franchise’s headquarters. This is where you will hone your skills as a business owner and learn the tricks of the trade when it comes to running your particular franchise. But your personal learning journey shouldn’t stop here. As a franchisee, you should continue to invest in your professional development. This continued education can take many different forms including:
Getting your franchise operation up and running is a huge accomplishment. However, your work doesn’t stop there. If you want to achieve profitable franchise growth and perpetuate stability, then you should:
If you possess the drive and passion needed to run a business and are willing to put in the work to develop your franchise plan, then you’re ready to succeed. Regardless of where you are in your franchise journey, we’re here to help. If you’re still searching for a franchise that is a perfect fit for you, then feel free to visit FranchiseOpportunities.com to explore your options. Check out our resources page for more information about the franchising process, or reach out to us directly and we’ll work with you to create a customized franchising opportunity that meets your goals.
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