Are you an entrepreneur looking for a rewarding and lucrative way to start your own business? Owning a franchise might be your best bet. Becoming a franchisee means buying into a proven and successful business model. Although a franchise broker or consultant can tell you more about this low-risk way to start a business, we’ve pulled together the answers to the most asked questions about franchise business ownership.
What Are the Advantages of Owning a Franchise Business?
An Established Brand with a Good Reputation
The franchise organization model offers aspiring franchisees the ability to grow under a well-established brand with a solid reputation in the market. Since customers already know about the franchised business’ existence, products, or services, franchise business ownership eliminates the need to spend money on marketing campaigns in the area where you plan to open up shop. Additionally, it gives you a head start because consumers usually trust a well-known brand more than an unknown business.
Proven Systems, Processes, and Procedures
An established brand with a good reputation comes with a proven system, process, and procedures for finding locations, running operations, training employees, and more. With critical bases covered, you’ll be free to focus on other business aspects, including customer service, marketing strategies, and product development. Additionally, you’ll have more time to spend with family and friends.
Lower Startup Costs
Sharing the benefits of a larger group of business owners lowers the franchise business’ startup cost. Although franchising comes with a fee that allows you to use the franchisor’s trademarked brand and business processes, you’ll share in the franchisor’s collaborative benefits.
While you independently own and manage your franchise business, the franchisors provide marketing assistance to promote brand awareness across various territories, including online advertising. They also provide training and support throughout your franchise ownership journey at no additional cost except for travel expenses.
Easier Access to Funding
Getting financing from banks and other financial institutions is easy for franchisees because lenders consider franchised systems and models as low-risk investments. For this reason, franchised businesses are more likely to grow faster and achieve greater success than startup business owners.
Support and Ongoing Training
Franchisors offer support by providing training for the franchisee’s employees. Consequently, your staff can learn how to operate the franchise’s specific aspects, meet customer service standards, and more. You’ll be able to focus on what you do best and leave operations management training to the experts.
Getting the most comprehensive training and support your franchisor can provide is best if you want to run your business at its highest potential. In most cases, franchise owners receive training at headquarters, on-site, and ongoing training.
Franchisors may conduct a week-long training at headquarters at a main franchise office or digitally. During this stage of training, they’ll introduce the key members of their executive leadership team and their new franchisees. They’ll also discuss how their specific business model works and conduct evaluations to ensure that you’re fully prepared for the next steps in running the business.
Furthermore, franchisors familiarize franchisees and their employees with their brand’s standard operating procedures and best practices by conducting on-site training at new franchise locations. In addition to on-site training, franchisors provide ongoing resources to help their franchisees stay current with changes in brand direction, market trends, products or services, and more. This ongoing training keeps you on top of your game throughout the lifetime of your business relationship. Your contribution as a franchisee to ongoing training includes providing relevant feedback and addressing roadblocks or challenges to optimize the business for all stakeholders.
How Can I Become a Franchise Business Owner?
Choose a Trusted Franchise Consultant
You’ll want to find a trusted franchise consultant with experience and knowledge in the franchise industry. It’s best to look for someone with a strong track record and positive reviews from past clients. You can also ask for referrals from friends, family, or colleagues who’ve previously worked with a franchise consultant.
Discuss Your Needs and Goals
Your initial consultation is the best time to discuss your needs and goals as a franchise business owner. Let them know about the type of business you’re interested in, your budget, and your timeline. You’ll want to be as specific as possible to help them understand your requirements and find the best franchise opportunity for you.
Get Franchise Recommendations
Once they understand your needs and goals, they’ll provide you with a list of franchises that are a good fit for you. They may also give additional information, such as market analysis, financial projections, demographic data, and other resources to help you research potential franchises and make an informed decision.
Attend “Discovery Days”
Most franchisors offer discovery days to allow aspiring entrepreneurs to learn more about the franchise. Furthermore, the franchise consultant may accompany you to these events, share their insights, and support you. They’ll also help you evaluate the franchises as you get a firsthand look at how they operate.
Review the Franchise Disclosure Document (FDD)
After identifying the franchise opportunity that piques your interest, you’ll want to review the FDD. Reviewing this legal document ensures that you understand the terms of the franchise agreement and what you can expect from the franchise. It indicates detailed information about the franchisor, the franchise system, and the agreements they must sign.
The FDD outlines several sections, including a description of the company and its history, biographical and professional information about its officers, directors, and executives, the company’s financial performance, and any litigation or bankruptcy history. The FDD also indicates the initial and ongoing fees required to establish the franchise, established restrictions on product sources and services, financing arrangements offered by the franchisor, and the assistance they’ll provide in advertising, computer systems, and training.
The franchise consultant can help you review the FDD and explain the terms and requirements you may need clarification on. They can also assist you in negotiating the franchise agreement if necessary.
Finalize the Investment
Once you’ve decided on a franchise, the consultant can help you finalize the investment by connecting you with franchisor representatives, helping you with the financial aspects of the investment, and providing ongoing support as needed. Furthermore, they can help you navigate obstacles or challenges that may arise while becoming a confident and successful franchise business owner.
Looking for a Franchise Broker?
FranServe is the world’s largest franchise consulting and expansion organization. You can count on us to help you achieve your dreams of business ownership through franchising. Contact us today to make an appointment.