The franchise industry is rapidly growing! Many budding entrepreneurs see the benefits in opening a franchise; including being their own boss and growing a business that already has a successful blueprint laid out. If you’re considering opening a franchise business, here are steps that may help you with the process:
6 Steps to Start a Franchise Business
- Do you own due diligence and find out as much information as possible, including what type of franchise interests you, what location options you have, a timeline for opening, etc. Lloyd Claycomb, CEO and franchisee, suggests spending sufficient time on the exploration process in order to set realistic goals.
- Contact the franchise. The next step in your new endeavor is to meet with the franchise business that you’re interested in. Learn the requirements to open your own franchise, determine operations information and find out the kinds of training, marketing and operational support the franchise representative can offer you.
- Create a sound business plan. Review all of the information that you’ve received from the prospective franchisor as well as your own research into market conditions. Incorporate this information into a thorough business plan. Make sure your business plan includes estimated investment costs and projected returns. The quality and legitimacy of your business plan can dictate not only whether you are allowed to open your own franchise, but also whether you’re approved for any loans you may need.
- Determine financial options. Internal financing options are typically available through the individual franchisors in order to help the franchisee afford the cost of opening a new franchise location. All programs have varying benefits, but typically appear in a low-interest environment with more relaxed approval standards, which are usually easier to obtain that the more traditional loans offered at banks and credit unions.
- Finalize your agreement. When you’re sure you meet all requirements for franchise ownership, you may proceed to signing a binding agreement with your franchisor. Always be sure to have your attorney review the contract before you sign it. If you have any questions or need more information, take the time to get satisfactory answers from franchise representatives before agreeing to anything.
- Register for any internal training/orientation programs. It’s common in the franchise world that all new owners are required to participate in training, which will help them prepare to run their new business. A franchise typically has figured out their own unique recipe for success, so the new business owner must take the time to learn the secrets of the franchise.