How to Open a Franchise
One of the easiest and most comfortable ways to start your own business is to open a franchise. But do you know how to do it? In this article, we will show you the most important characteristics of the franchise and the points that you must consider.
What is a franchise?
First of all, let’s see what a franchise is. We’ve all heard of it at some point, but it doesn’t hurt to summarize the basic information. A franchise is when a consolidated company (franchisor) sells its know-how or way of doing things to another person (franchisee) to sell its products or services as it would sell itself.
That means that from the first moment, you are going to use their brand. They will tell you how you have to decorate the store, how you have to display the products, how to provide services, what advertising you should do, how to treat customers, etc.
Among the advantages of this method we can find:
– It is a well-known brand with a reputation that customers trust.
– The franchising company provides resources such as staff training, uniforms, business name, logo, and advertising.
– A higher success rate is guaranteed.
There are also disadvantages to consider:
– Not everyone who requests it is granted the opportunity to set up the franchise.
– The benefits are usually lower than a successful traditional business since a significant percentage goes to the franchising company.
– You have to be governed by the rules of the company. Freedom is not total.
– The price of franchises can be very high.
Steps to follow to set up a franchise
If, after reading these descriptions, you are still interested in setting up a franchise, we inform you of the steps to follow:
1. Do your own research
Ask yourself: What kind of franchise business do you want to own? What kind of business do you prefer? Maybe bar or restaurant service-related, or maybe clothing sales.
2. Ask the franchisor for information of interest
Once you have several franchises in mind, you should ask them for specific information to make a good decision. These are some of the documents that should not be missing:
– Proof that the franchisor is the owner of the brand.
– Mission and vision of the business, as well as previous experience.
– Estimation of necessary investments and expenses.
– Forecast of sales and results.
Make sure you base your forecasts on data from previous years or realistic market research. You can even find out if the company offers Discovery Day and attend it to know more about the trademark.
3. Make a pre-contract to advise you with a specialist
When you have finally decided on a franchise, we advise you not to sign the contract right away. Ask for a pre-contract of a couple of months to seek advice from a specialist and to be able to negotiate the final contract.
4. Choose a franchise location
The franchisor will usually have specific requirements and guidelines about the location. What’s more, most of them have a specific number of squared metres of space. So be sure to know exactly what your franchisor wants.
5. Take the provided franchisee training
That point is obvious, but if you didn’t know about it, make sure you take the provided franchisee training! It’s essential to understand the critical points of your new business and how to make the best of it.
A franchisee training will give you all the knowledge you need about the business, but also marketing, how to get new clients and make them like your business. Besides, you may learn what people you need to surround yourself with to make the business work.