14 Key Steps in Opening a Franchise
Below are some guidelines on how to follow each of these steps in opening your own franchise.
1. Online Self-Test
Franchising isn’t for everybody as it involves a particular mind-set and attitude and with so many different franchise companies on the market how do you choose the right franchise to invest into?
Our diagnostic tool, the Franchise Self-Test, has been designed to help you identify a starting point from which to commence your own research.
The test’s 10 questions will help identify whether franchising is the right way into self-employment for you and will find the best type of franchise match for you.
Here are some helpful links to help you research your franchise:
3. Set your budget
It is a big step from deciding to start a franchise to actually opening your doors for business. For many, one of the biggest hurdles is approaching the bank for finance.
Banks have learnt that it can be safer to lend to franchisees of well-structured ethical franchise systems. The track record of the franchisor is most important.
Here are some helpful links that will help you set your budget:
6. Apply to find out more information from the franchisor
Fill in the enquiry form at the bottom of the franchise profile that you are interested in and the franchisor will get back to you with more information
7. Meet with the franchisor and franchisees
Visit the franchisor to confirm your choice:
25 questions to ask the franchisor
Visit franchisees to confirm your choice:
You should visit existing franchisees to learn from their experiences and to find out their opinions on the services provided by the franchisor. Good franchisors will always allow you free access to any franchisees in their network and, in most cases, existing franchisees will be happy to talk things over with you.
Some of the questions you should ask are:
- Is your franchise profitable now?
- Is the franchisor aware of changes in the marketplace and quick to adapt?
- If there is illness, does the franchisor offer to help?
- What kind of on-going support do you get?
- Did you get good training, systems and manuals?
- Is the franchisor keeping their end of the bargain?
- How long did it take to recoup your investment?
- Does the franchisor welcome suggestions from franchisees?
8. Get a copy of the legal documents
(Disclosure Document & Franchise Agreement)
9. Take 14 days to review the information
Here are some helpful links that will help you review the legal documents:
10. Apply for funding
Here are some helpful links that will help you through the process of applying for funding from a bank:
11. Sign the franchise agreement
Once you and your franchise solicitor are comfortable with the terms in the franchise agreement you will arrange to sign the franchise agreement and make payment as required in the agreement.
12. Sign lease agreement and pay rental deposit
Ensuring that you have the right location is vital to any franchisee’s success. The franchisor must work closely with you in selecting the best possible site to position your business, ideally using scientific tools based on Geographic Information Systems (GIS). This should also include guidance with lease negotiations.
13. Hire staff and attend training for yourself and your staff
In order for franchisees to be successful at running their business, they need well-structured and informative training courses. The majority of franchisors have put a training programme in place for new franchisees. It is the franchisee’s duty to then train their staff with their knowledge if the franchisor does not provide this.
14. Open your franchise business
And welcome to the franchising world! If you have any questions to ask our experts you are always more than welcome.
