Opening a franchised business is a brilliant way to indulge your entrepreneurship with the support and reinforcement of a well-established brand and proven operational practices. There are now an innumerable amount of franchise opportunities across a variety of industries and sectors, and more people than ever are embarking on their franchise journey.
Of course, launching a franchise does vary slightly from starting a brand entirely from scratch, but exactly what is involved? Read on for the 10 steps from conception to completion for your franchise launch.
1: Self Evaluation
With so many franchising opportunities now available, it is imperative that you find one that fits you, your passions, your way of working and your ambitions. It’s important to be sure that:
- You are able to invest the number of hours required for the franchise launch and ongoing operations (the franchisor will usually be able to advise on how many this may be)
- You agree with and are able to commit to the pre-determined business methods the franchise requires
- You are comfortable with not just the reputation of the existing brand but also its plans and direction for the future
- You are able to finance the launch costs and commit to the ongoing fees required
- You truly believe in the brand’s values, products and/or services and personally care about them.
Once all of these things marry up and balance out, you’ll be able to pick the right franchising opportunity for you.
Of course, the standard franchising pack a franchisor provides is designed to give you plenty of information on the business; but it’s not the be all and end all. It’s imperative that a franchisee sufficiently researches into lots of areas of their market, including (but by no means limited to):
- Competitors locally and their USPs
- Areas in which the franchise can gain competitive advantage amongst competition
- The appropriateness of the franchise’s products/services for the local area
- The prevalence of the target market segment in the location in which the franchise is opening
- Relevant market statistics and data to help analyse future market development and opportunities
- Existing franchisees of the business and their experience with the launch of their business alongside the daily operational activities.
3: Submit an Application
Once you’ve identified a good fit with a franchise brand and are confident of its ability to perform and succeed, you can begin the application process with the franchisor.
This often includes attendance to a discovery day with the franchisor, which provides the opportunity for an in-depth detailed meeting at a local franchise outlet or the business’ corporate HQ. This allows for networking amongst franchisees (both existing and potential) and learnings to be made between them. It’s common at this point to be introduced to those within the wider brand who will work directly with the franchisees in order to connect and understand better the workforce (as often franchisees are geographically removed from the main company HQ).
Most franchisors will provide details of current franchisees who are willing to discuss their experiences with you as part of the validation process before you commit and invest. While you likely will have met some at the discovery day meeting, it’s important that a real connection is made with at least two others who will speak with you openly and honestly about the franchisor’s working practices and support. This can help guide your direction of focus through the opening and then operating process.
5: Find a Location
If you haven’t already, at this point you need to identify and secure a location for your franchise outlet or office. This location should take into account the market research already completed, so that the base is somewhere appropriate and suitable for the target audience. Franchisors often do stipulate certain parameters around geographical location and so this too will need to be factored in.
6: Secure Funding
It’s time to take the plunge with your chosen franchise and pay the bills! Most entrepreneurs require some form of business loan or funding grant in order to raise the money required for the initial investment, but if you’re able to self-fund, this may be quicker and less stressful. There are plenty of financing options available for franchising but it’s important to remember that you need to consider more than the upfront initial cost – you will also need enough cash reserves to cover expenses throughout the period before the business can make a profit.
7: Sign on the Dotted Line
Finally, the franchising agreement contract can be signed. There is variance in the level of negotiations franchisors are willing to enter into (some none, others more open); although by now you should already have a fairly good idea of their parameters. It is usually recommended that legal advice is sought before anything is committed to.
8: Put in place Permits and Insurance
Every industry and locale has its own requirements for business permits and insurance, and the franchisor may too stipulate set terms. Compliance will need to be ensured with local authorities, the franchisor and any relevant legal industry bodies, and everything secured before any business activities begin.
9: Pick your People
Staff can now be interviewed, hired and trained. One benefit of franchising is that usually full staff training will be provided by the overarching brand and so everyone will receive consistent and thorough branded development. Once everyone’s fully trained and ready to go…
The franchise can now open. Ensure plenty of marketing has put in place so that the target audience know the business is launching, and seek out relevant PR opportunities to further the message. It’s often an idea to run a ‘soft opening’ for family and friends first, to give the chance to iron out any teething issues, and then once rectified, open to the public.
And there you have it: you’re up and running as a fully fledged franchisor! Ten steps to success and from here, business may boom.