If you are low on budget and don’t want to spend much on capital, then franchising may be the best way to expand your horizons at a fast pace. You can certainly pump up your profitability if you tackle it the right way. Especially in this challenging economy, becoming a franchisor is not an automatic ticket to success.
Opening your franchise is a big step for those who are not aware of ‘How to franchise a business’ and the major stages along the way and it can be somewhat intimidating. As compared to growing through company-owned units, when the right concept is franchised effectively, it can be a great expansion strategy that does not require as much upfront capital.
Defining A Successful Franchise
Having a successful franchise and hopping on a bandwagon of an idea that’s already proven successful. But to get on this route entails many thoughtful decisions early on that will affect your business for years to come. To start with, there is a lot of legal paperwork to wade through which makes sure that your business complies with federal and state laws that regulate the franchise industry. Even with the business model, set operations, and brand laid out for you, much thought will have to go into location, hiring, and management like any other type of business. While for some newbie franchise owners who are fiercely independent, the loss of control can be a challenge.
So by now, you know that you will have to find the right franchisor if you wish to become a franchise. You want a reliable brand, rock-solid business model, outstanding support, and a small business with a good reputation for supporting its franchisees. So the question is how do you get there? To simply put, apart from the basic leg work everyone has to do, you would want someone who gives you inside track of the top franchises. That means, with FranGuidance’s extensive discovery process you will get behind the scenes of the franchise brand and learn all the positives of the franchise firsthand which enables you to understand if they are a good match or not.
Before we get to the depths, let’s start with the basics first.
What is Franchising?
As we have mentioned above, a franchise is a tried and true business model that lets you (the franchisee) to use the franchisor’s business model and tap into an existing customer base while following your entrepreneurial passion. There is a cliche that when you invest in a franchise it lets you work for yourself but not for yourself. As a franchisor you will be offered various kinds of assistance, training support services, and advertising. Ultimately you are the BOSS, but the franchisor provides you with a Ready-Made Template for you to follow.
Franchising comes with a lot of fundamental advantages for an entrepreneur. The benefits include:
A proven business model
A well-established customer base and loyalty
Access to ongoing support
Existing brand recognition
Cutting edge tools to run your business effectively
Moreover, when you first think of a small business franchise, you probably think of eating joints and takeaways. Without a doubt these are popular international franchises, there are virtually many franchises in any type of industry. So the franchises not only differ by the industry but also by the specific framework. Each franchise will have a unique take on how to start and build a successful business.
So finally with this little and important background information in mind, let’s take a glimpse at what you came here for- learning how to franchise a small business!
Essential Steps To Open A Franchise Business
Starting with self-evaluation, decide which franchise you would want to operate: You should be extremely selective when it comes to choosing a franchise industry. Think about this: Which industry appeals to you when you think of a franchise business? Are you ready to work for long hours? If you already have a business in mind, or at least a general field you need to check if your personal values and the overall business goals align together.
As with so many things in mind, do your market research: Before you finalize one of the most seemingly strong contenders, it is important to check for clear guidelines. You want to be sure that your shortlisted franchisor is sending one clear message from one clear source and that message is consistent. Here no detail is too small. To simply put, before you hop on to the next step, monitor everything, pay close attention to videos and pictures, and monitor the customer base in a detailed fashion. The best way is to start looking at the demographics in your area. That means, if you want to open up a franchise in an area that has a lower median income and low tourism, then high-end franchises won’t work. A realistic approach is what you need to follow.
Find a Certified mentor with Franchise Expertise: To invest in a franchise that meets your strict standards you should note that there is no substitute for partnering with people who have been there and done it before. With large, small, mid-sized and some very newer, and exciting concepts, you want as much details and first-hand information about what it is like to actually operate your chosen franchise. Your consultant will help you set up a meeting so that you can get to know each other well. This creates a great chance for you to know about the culture, values, and policies, and determine if this model will be suitable for you or not.
Check your finances: Before signing the business agreement it is not always the case that you have the required funding to invest. So it is important to have a reliable form of business funding for your new business venture. Depending on the brand you have chosen, the start-up cost can vary. Fret not, there are a lot of assistance and financing options available so that you can be covered with enough cash reserves. For instance, you might be responsible for your equipment and supplies. Do your due diligence, look through the rental rates and get a sense of what you will be expected to invest in when you choose the franchise model.
If you have read till the end, you have already taken the first step! Now that you have a solid foundation to what franchising is all about and the steps involved, it is time to forge on this model further.
FranGuidance is dedicated to helping you find a franchise that is right for you and your goals, we would be glad to speak with you and understand your motivations, interests, and goals.