Franchising
Learn more about how franchising can be your path to financial freedom.
What is Franchising?
Franchising 101
Franchising is a licensing agreement between two parties, the Franchisor and the Franchisee.
Typically, the franchisor provides a thorough outline, a methodology, or rulebook for opening, managing, promoting and operating the business.
There are mandated steps to provide consistency to the consumer population, creating uniformity in the experience from location to location. The franchisor provides and enforces established guidelines based on experience (avoid mistakes and apply best practices) to help the franchisee make positive management and execution decisions, and to position the business in the marketplace to compete for the consumer’s attention.
For entrepreneurs who want to start their business without the stress of going at it alone, a franchise will offer a support system and recipe for success.
Case Study
The Benefits of Owning a Franchise
Owning a business is filled with complexities that often deter businessmen and women from ever leaving the corporate world. However, there is a solution. And, it’s one that offers a proven business model and more security than operating an independent business concept. Franchise ownership is quickly becoming America’s preferred way to start a business.
Access My Free Resource Library
I encourage you to do additional research into franchising. Here are my trusted resources.
How to Buy a Franchise - Step by Step
1. Be sure about your reasoning
If you think a particular franchise is good for you and you can make it big after buying a franchise, what makes you think so? You need to look upon that matter and make sure that your thought is legit. If a friend of yours has opened up a restaurant business and is making good money, it doesn’t mean that you will be able to do the same if that is not your niche. If you are unsure about what business to invest in, you should research the franchise market thoroughly and do a self-assessment on what you are interested in. If you cannot do it by yourself, take help from a professional franchise business coach. They will help you through the process.2. Research which franchises you may want to own
You have the money but you do not have the idea. In that case, you may end up investing in a franchise that you should have never bought. Investing in a franchise needs thorough research and a full concept of the business. If your interest lies in the clothing industry but you end up buying a restaurant franchise just because you saw someone doing good at it doesn’t mean that your business will perform well too. A business owner can perform the best in the industry where lies their happiness and comfort. So, before investing in any franchise, you need to research the franchise business market well and then decide.3. Begin application process
Once you and your franchise business coach have decided on what franchise would best match your field of expertise, you can begin the application process. Reach out to the franchise and see what they require. Every franchise has its own set of regulatory guidelines regarding opening a new outlet. See if you have all the documents that are required and if not, prepare everything that you would need to fill out the application form. A franchise seller needs a lot of documents and paperwork regarding your qualifications, the availability of land for the outlet, the documents of the place where you are opening up your business, and a lot of other things too. Your franchise business coach should be able to help you with the whole process when you apply for a franchise.4. Set up your “Discovery Day” meeting.
Discovery day is when you show your franchise that you are ready for doing business with a franchise company if you get accepted. It is always better to make arrangements for your ‘Discovery Day’ meeting with a franchise owner beforehand. You need to check the following before you show up before the franchise seller on the day of the meeting: Complete your personality profile as a candidate. Get investment for the franchise pre-approved by your financer. Prepare a list of any questions, concerns, and issues you may have as a candidate. Discuss discovery day agenda, arrange accommodations, dress appropriately, and do not forget to carry all the necessary documents and paperwork on the day of the meeting.5. Apply for financing
If the Discovery Day meeting went well and you managed to acquire the franchise, now is the time to get serious about it. If you have enough financial aid available with you, then it is probably fine and you don’t need any sort of financial assistance. However, in case you are not self-sufficient, apply for financing as soon as possible. You need to start working on setting up your business as soon as the franchise seller asks you to. It is important that you do not delay the demands of the franchiser and make sure that everything is set in place as soon as possible.6. Review and return your franchise paperwork very carefully
Any business that you are going to start requires a lot of paperwork and documentation on both ends. This is also quite important as paperwork acts as the backbone for the business. It is an agreement between the franchiser and the franchisee which holds all the rules and regulations, and conditions of both parties. Once the franchise seller is done with the paperwork, the papers and documents will be handed over to the franchise buyer for his sign of approval. This is your chance to read and review the paperwork thoroughly before returning it to the franchise seller. Keep in mind that reading the franchise agreement is quite an important part of the whole process as it is what both parties will follow. The franchise agreement can be considered the most important document in the whole process. Keep a copy with yourself if you have to and do nothing that violates the agreement between both parties.7. Buy or rent a location
If you are going to start a business, you will need a suitable location for the business. Choosing a location is an important step. For instance, if you are opening a restaurant in an area that has a lot of rush but has a lot of eating places as well, your business will not be able to flourish as much as you might expect. Hence, location plays a huge role in attracting and retaining the magnitude of your business. Good location decisions will give you surprising results, while if the choice of location is bad, your business might suffer unimaginable losses, in the worst-case scenario, might go below the break-even point and shut down. If you are finding it difficult to determine the best location for your business, try consulting a franchise business coach. Business coaches charge a good amount of money, maybe a few thousand dollars, which may or may not be a part of the franchise fee, but the help they provide can be a lifesaver for your business. They will also help you choose the right franchise and take care of the franchise financing.8. Get training and support
It doesn’t matter how interested you are in a franchise or how much knowledge you have, there is always more to learn about the franchise. When you are buying a franchise and starting a business with it, you must be ready for getting training to hone your skills. The franchise will provide you with professionals who will train you and support you in every aspect of your newly started business. The franchise will do everything possible to help and support you. The training and support are basically to teach the new franchisees about the compliance rules and regulations of the franchise. The other objective of the training is to help the outlet match the standards of the franchise and perform in a way that is homogenous to the other outlets of the franchise. They pay special attention to details and want everything to be up to the mark. Training and support are basic measures that a franchiser takes to help the franchisee set up their business outlet.The Benefits of Owning a Franchise
Opening a business and developing it all by yourself is all well and good, but have you ever thought about why people consider franchising rather than opening their own businesses? The reason is simple. It comes with a heavy load of advantages. Albeit everything comes with its own advantages and disadvantages, it is a fact that cannot be altered. In the same demeanor, franchising comes with both as well, with advantages sitting on the lower end of the seesaw. However, because you are investing a heavy load of money in buying a franchise, you must consider all the pros and cons and then decide. Here is a list of all the advantages that buying a franchise will provide you with:1. Support from a larger body
If you are ready to invest in a franchise, you might have the benefit of saving yourself the hassle of starting and developing the business on your own. Buying a franchise provides you with support from the entire network of the franchising company. These larger companies hold annual conventions or meetings where you get to learn a lot more about the business and develop skills and qualities as a business owner.2. Financing becomes a piece of cake
If you are opening a business of your own, you may find it difficult to find a financer for your new business. Even if you are able to find one, the collateral would be huge and you would want to NOT take any financial help. However, if you are buying a franchise, the financer would rest assured that you have the know-how and the means of running your business. In such cases, it becomes a piece of cake to find financiers and investors.3. A wide-spreading network of contacts
If you are running a business under the franchise of a big brand, you make bigger connections. There are business owners who have bought franchises but are also running their own businesses. If you have started a business in the same field as your franchise, you can easily obtain raw materials for your independent business from the same seller. Developing relationships with different providers helps you in evaluating the market prices and comparing the quality of products delivered by different providers.4. Lower failure rate
Independent businesses are more prone to failure than businesses running under the name of a franchise. The reason for this is that franchises run chains of their outlets and are well known for their products internationally. If you open a well-known pizza franchise in your city which has never seen pizza before, everyone will flood in and your business will boom. Why? Because everyone knows what pizza is and everyone knows about the brands that deliver delicious pizza. Hence, people would crave the new type of dish in their city and love to have it. Hence, a franchise may never go through failure or may have a low failure rate.
As we can see, owning a franchise is a huge advantage for business owners. It comes with many perks and benefits and has an edge over independent businesses. The list of advantages is long and as an owner of a franchise, a person enjoys all sorts of luxuries of running a business under a franchise’s name.
Franchising 101:
Franchising is a licensing agreement between two parties, the Franchisor and the Franchisee.
Typically, the franchisor provides a thorough outline, a methodology, or rulebook for opening, managing, promoting and operating the business.
There are mandated steps to provide consistency to the consumer population, creating uniformity in the experience from location to location. The franchisor provides and enforces established guidelines based on experience (avoid mistakes and apply best practices) to help the franchisee make positive management and execution decisions, and to position the business in the marketplace to compete for the consumer’s attention
Include:
Difference between franchising and independent business
Add stats of which business model is more likely to fail.
Explain in detail business infrastructure/ “guard rails” and why it’s important in starting a business
Examples of franchises with great “guardrails.”.
How do you know if franchising is right for you?
A Free, Consultative Approach
I provide complimentary consultation services to individuals considering franchise ownership. Much like an Executive Recruiter, when a match is made, the franchise company, sends me a placement referral fee.