An Entrepreneur Who Opens a Franchise Must
Opportunities for entrepreneurship are varied — and the sky’s the limit in terms of which business organization idea to pursue. But if you lot want to start a concern that comes with an established brand and business model, a franchise might exist a good fit.
Franchises allow individuals to get their feet wet with the responsibilities that come forth with owning a business. While information technology takes hard piece of work, there are many success stories.
Franchise owners Algy and Kermie Irvin opened a popular franchise location, Painting with a Twist, in 2009. Not only did they provide their customs with a creative effect pick — they too saw a dandy render on investment, with projected annual growth of 19% in 2016.
Are you feeling inspired to own a franchise location of your own? Proceed reading to see what it takes to get started.
When you call back of the give-and-take “franchise,” visions of McDonald’s and Dunkin’ Donuts might come to listen. A franchise is a contractual relationship between an individual (franchisee) and a business (franchisor). The contract allows the franchisee to distribute the franchisor’s products and use its name and make.
In 2017, an estimated 745,290 franchises were operating in the U.S. But which franchise should you open up? And what’s necessary to get started?
Don’t forget to practice your research. Your kickoff important decision is which industry you’d like to go into. Are you passionate about food? Take a look into restaurant franchises. Are you a fitness vitrify? Check out gym and workout studio options.
Is there a demand in your metropolis or town? And tin that need exist fulfilled past the franchise you choose to open? For example, let’s say your community is in need of after schoolhouse programming or tutoring. Consider opening a franchise, like Mathnasium, that offers tutoring for students.
It’s also a skillful idea to visit local franchises near you. Ask the owners what they love about their franchise — and aspects of the business organisation they aren’t a fan of. They’ll exist able to speak to their experience with the franchise and y’all’ll be well-informed when you brand your final decision.
There are many franchise options, but sure franchises stand out from the remainder. Check out the best of the best — you’ve likely seen some of these establishments around town:
- McDonald’due south
- vii-Eleven Inc.
- Dunkin’ Donuts
- The UPS Store
- RE/MAX LLC
- Sonic Drive-In Restaurants
- Great Clips
- Taco Bell
- Hardee’s Restaurants LLC
- Sports Clips
In addition to determining which industry to pursue — consider the initial investment required, competition in your area, the training offered by the franchisor, and ongoing costs. This information is often plant on the franchisor’south website (east.g., Dunkin’ Donuts, Taco Bell, and Subway). With these things in mind, evaluate which franchise selection is the best fit for yous.
How to Start a Franchise
Now that you’ve explored a few franchise opportunities, it’southward time to get downwardly to the nitty gritty details. Starting a franchise is a big commitment, and there are a few things to consider. Allow’s have a look.
one. Evaluate the costs
Just like any other minor business, in that location are initial costs to getting your franchise off the ground. Here are some mutual start-up investments:
– The franchise fee is the apartment price a potential franchisee pays upwardly front to operate the franchise. Before you pursue a franchise opportunity, make sure y’all tin cover the initial costs, which typically range betwixt $20,000 and $l,000 and can be as much equally $100,000, depending on the size of the franchise. Luckily, there are options for financial assistance, such as an SBA loan or bank loan. These can bolster your initial cash investment in the business.
Equipment and Supplies –
Franchisors will provide you with an idea of what equipment will be necessary and how to obtain it. Some even offering financing options for these initial costs.
– The franchisor often provides recommendations for location types and tin advise you lot on what volition piece of work best for your business. For example, McDonald’s has specific requirements for their locations (east.chiliad., a building area of 4,500 square feet and on-site parking).
ii. Franchisor requirements
A franchisor often has requirements of a franchisee before they tin can offer a franchise understanding. 7-Eleven, for example, requires new franchisees to have U.South. citizenship or permanent residency, an excellent credit score, and retail experience. Other mutual details a franchisor might consider include:
- Net worth
- Industry experience
- Cash available
- Other sources of income
These may vary depending on the industry you are joining. And it’s best to contact the franchisor you’d like to work with to go more details and an application.
iii. Franchise disclosure document
A franchisor is required to provide you with a franchise disclosure document (FDD) before any contracts are signed. Information technology will include information regarding initial fees, estimated initial investment, and much more.
The franchise disclosure document provides the potential franchisee with all the data they demand to brand a decision about whether or not to enter a contract with the franchisor.
4. Review the franchise agreement
Once your application is canonical, the franchisor volition provide you lot with a franchise understanding. This is the actual contract you’ll sign to get a franchisee and own and operate a business organization under the franchisor.
It may be helpful to hire a lawyer with franchise experience to help yous advisedly review and understand the understanding. When you’re set up, sign to begin your journeying as a franchisee.
five. Choose a location
Next, you’ll demand to find a place to ready store. Depending on how much money yous’re willing to pay upward forepart, ownership property and leasing an existing space are both options. And, franchisor’due south often provide recommendations for what type of infinite will piece of work all-time.
This is the time to work closely with your franchise to ensure the site you pick is the correct size for the shop’s needs — and the traffic patterns and foot traffic of the site marshal with the hours your franchise will operate. Rent costs are some other consideration, and it’s best to work with a legal advisor to ensure the lease is the all-time fit for you and your franchisor.
It’s time to learn the ins and outs of the business organization. Franchisor’s offer preparation sessions to teach you and your new hires all you demand to know about the products or services you’ll sell, their guidelines and policies, and the systems you lot’ll use. Your franchise will often provide training on marketing, direction, and business concern basics you’ll need to operate the concern.
vii. Open for business organisation
Once your franchisor sends a representative to approve your location, it’s fourth dimension to market place your grand opening. Franchisors usually take pre-determined ads, signage, and promotion ideas for the opening. And they might even provide you with a corporate consultant to ensure opening day runs smoothly.
Congratulations! Y’all’re well-prepared and prepare to open. Get prepare for your new life as a franchisee.
If you’re inspired to start a franchise, use this blog as a toolkit to hit the ground running. And if you’re interested in learning more about what it takes to become an entrepreneur, check out How to Become an Entrepreneur, four Fundamental Traits of Highly Successful Entrepreneurs, How to Start a Business, and ix Valuable Entrepreneur Training Courses.
Originally published Sep xiii, 2018 viii:30:00 AM, updated September 13 2018
An Entrepreneur Who Opens a Franchise Must