Every year, millions of people dream about handing in their notice and branching out on their own. While the visions of freedom can be compelling, for many, this remains a dream due to the risks involved in giving up a steady salary and/or the lack of funds required to get a business up and running. Buying into a franchise is an excellent way of gaining the benefits of your own business with the safety net of having an established brand name behind you.
If you’ve ever thought about opening a franchise but aren’t sure how to go about it, the following franchise checklist which covers the Top 10 Steps to Follow when Opening a Franchise will set you on the right path to your new career:
Before even starting your search for franchise opportunities, you need to look a little closer to home – yourself. This important first step to follow when opening a franchise involves examining your skills, experience, qualifications and motivations, and your personal circumstances to figure out if franchising is right for you.
The franchise checklist questions to be answered will include:
- How much (if any) of your personal cash are you willing to invest?
- Will you be comfortable with part of your hard-earned profits going to the franchisor?
- Will you be comfortable with your professional reputation being linked to the brand?
- Will you be happy to follow the brand’s guidelines and protocols?
- Do you have the self-discipline to work for yourself?
- Are you willing to work long hours (often seven days a week) in order to get your business off the ground?
- Will you be comfortable hiring and firing staff?
If the answer to all or most of these is yes, then there’s a good chance that franchising will be a good fit for you.
2. Reach out to an expert
While this one is not strictly necessary, a franchise consultant can really help to steer you in the right direction if you’re a complete newbie to the franchise business.
Although you will need to pay a fee for the services of a consultant, this will often be a good investment as it can save you a lot of time and money in the long run.
3. Hit the books
One of the most important parts of the process when opening a franchise – and one of the most common stumbling blocks – is research. It’s vital that you conduct proper, comprehensive research before committing to a franchise opportunity. With this, here are a few things that you should be looking out for:
- What type of business are you interested in – what are your passions?
- What kind of businesses are successful in your local area – and how many of these businesses are there?
The idea here is to look for a match between your personal evaluation and the opportunities available. Most franchisors will provide some of this information on request, so don’t be shy about asking for it from the ones who make your franchise shortlist.
4. Attend events
Many franchisors hold local events, often known as Discovery Days and, if you find that there’s one in your area, these are absolutely worth attending. These events tend to offer a treasure trove of information and go a long way to helping you make a decision.
5. The inside job
If you’re looking to find out exactly what it’s like to run a franchise for a particular brand, you can do no better than to speak with somebody who is already doing just that.
You don’t need to do anything as formal as a full-on interview but, requesting a chat over a coffee can be a great way of finding out the lowdown on a particular franchisor as well as potentially making a new contact to help you on your way as you get started. Many franchisors actively encourage this, so it’s always worth making an enquiry.
6. Location, location, location
When it comes to your franchise journey, finding the right site and location is half the battle. Again, you may be able to get guidance from the franchisor on this, so do always ask.
When looking at sites for your franchise, there are a few things to keep in mind:
Size – Is the building the right size for your needs, and does it contain all of your requirements, for example, a staff kitchen and bathroom?
Parking – Is there customer parking close to the location?
Low traffic – Is the site in a low traffic or traffic restricted area?
Surroundings – What kind of businesses are in the same location? Will the customers of these businesses be interested in yours? For example, if the location is primarily home to discount and pound shops, your high-end clothing store is unlikely to do too well there.
Your ideal location will be one that receives lots of relevant foot traffic, which is likely to lead lots of potential customers to your door.
7. Find the folding
If you’re lucky enough to already have the funds required to power ahead with your franchise, that’s great but, otherwise, now’s the time to make a start on getting the funding that you need.
To do this, you’ll first need to draw up a business plan in which you’ll lay out all the pertinent financial information regarding your business; including what you have, what you need, what you expect to make, how much you will need to withdraw for yourself and, finally, when you expect to be able to repay the funding.
Your business plan is important as you’ll pitch this to potential lenders/investors to secure your funding. Start by asking for advice from your franchisor and by researching your options. Funding options can include government grants, bank loans and crowdfunding resources.
8. Sign on the dotted line
Once you’ve chosen your franchise, found a site and secured funding, it’s time to seal the deal by signing your franchise agreement. As with any contract, it’s recommended that you have this looked over by a solicitor before going ahead and committing to the deal.
9. The legal stuff
When starting out in business, it’s incredibly important to make sure that you’ve dotted all your i’s and crossed all your t’s in order to avoid getting into hot water when it comes to the law. With most franchise businesses, you’ll be subject to permit and insurance laws and, it’s vital that you know what these are and that you make sure that they’re in place before you even think of opening up for business.
10. The people priorities
Now that you’ve got all your ducks in a row and you’re getting set to launch your business, it’s time to start hiring the staff that you’ll need to make it work. Ensure that you adhere to the franchisor’s guidelines when hiring employees to avoid starting out on the wrong foot.
When looking for staff, local newspapers and local area groups on social media are always an effective and inexpensive way of finding employees who live in the local area.
Once you have your workforce, you’ll want to seek guidance from the franchisor in terms of training, as most brands will have methods and processes which you’ll need to follow closely.
Finding, acquiring, and setting up your franchise can often be a pretty long-winded process. Still, it’s really important to take your time and avoid skipping any of the points from our franchise checklist if you’re committed to making your business a success.
Finally, once you have a launch date for your business, don’t forget to shout about it on social media and in local media. You may even want to think about holding a welcome event to lure those all-important customers to your door.