Multi-Unit Franchise Experts

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FAQs about Franchising: What to Know before Taking the Leap

For entrepreneurs and professionals tired of corporate life and looking to start their own business, franchising is often the ideal avenue for getting started. With a franchised business, you get the benefit of an established brand, a proven business model, and existing corporate know-how, as well as access to a range of tools and resources to help you succeed.

The International Franchise Professionals Group (IFPG) is a membership-based franchise consulting network with more than 1,300 franchisors, franchise consultants and vendor members. Together, our franchise broker group members guide aspiring business owners through the process of identifying and investing in franchise businesses. Our purpose-driven mission is based on integrity, ethics and collaboration. Whether you want to start a new career as a Franchise Consultant or grow your business as a Consultant, Franchisor, or Vendor Member, we will help you get there.

Although our franchise broker group has grown to more than 1,300 members, we value and maintain a family-like feel and a collaborative culture. Our innovative programs and training has raised the bar in franchising and set us apart among the industry’s franchise broker firms.

Are you considering franchising as a potential career option? Here are some of the most frequently asked questions about franchising and their answers:

What is a Franchise?

A franchise is an agreement between a franchisor (the company that owns the franchise) and a franchisee (the person investing in the franchise). A franchisor will provide services to a franchisee such as brand recognition, marketing, and training. In return, the franchisee pays a certain fee for the use of the franchisor’s brand, product, or services.

What are the Steps to Becoming a Franchisee?

The first step is researching different franchise opportunities. Make sure to investigate the potential earning power of the franchise, the length of the contract, the franchisor’s requirements and any additional costs involved in running a franchise.

Once you’ve decided on a franchise, it’s important to review the franchise disclosure document. This document contains all of the relevant information regarding the franchisor, terms, qualifications, and fees associated with the franchise agreement.

After you’ve reviewed the disclosure document, it is time to apply for the franchise. If accepted, the next step is to negotiate the franchise agreement and pay the franchisor’s initial starting costs.

Finally, it is time to start running the franchise. Set up a schedule and budget to track operating expenses and manage staff, and begin marketing the franchise to ensure it is successful.

What are the Benefits of Franchising?

One of the biggest benefits of franchising is the ability to leverage the existing popularity of the franchisor’s brand. With a recognizable brand, people are more likely to be familiar with the product or service you are offering, making it easier to find customers.

In addition, franchising typically offers the franchisee a business model that has been proven to be successful. As a franchisee, you won’t have to waste time finding out what works and what doesn’t—instead, you will simply follow the franchisor’s proven business model to ensure success.

Finally, franchising can provide you with access to resources and assistance that will help you succeed. Whether it’s training programs, financial assistance, or marketing advice, franchisors have typically put together a range of tools and resources to help you become successful.

What are the Potential Drawbacks of Franchising?

One of the biggest potential drawbacks of franchising is the fact that you will be bound by the terms of a contract. While the contract will outline your rights and obligations, it will also limit your flexibility as you will be required to operate according to the franchisor’s guidelines.

In addition, franchising typically requires a large initial investment. In addition to the upfront costs associated with purchasing a franchise, you will also likely need to pay monthly fees and royalty payments.

Finally, there is always the potential for franchisor-franchisee conflict over issues such as how the franchised business should be operated. While you will be given certain freedoms to run the franchise as you see fit, the franchisor will also have certain expectations, and conflicts can arise if these expectations are not met.

Topics:

Franchising,

Franchise Consulting,

Franchise Broker

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