Aspiring entrepreneurs looking to break into the franchising world often have a lot of questions about the process, from researching the best franchises to choose from to understanding the proper steps to acquire a franchise. With so many questions to answer, it helps to have knowledgeable and experienced franchise professionals on your side. Here, the International Franchise Professionals Group (IFPG) shares the most frequently asked questions from aspiring franchise entrepreneurs, as well as our insight into the process.
When an entrepreneur is researching franchises, the choices can seem overwhelming. In order to narrow down the choices, it is important to have an idea of the kind of franchise business you want to own. Do you want to start a franchise in a field you already know, or do you want to invest in a completely new industry?Do you want to run a brick-and-mortar business or are you more interested in a home-based franchise? Once you have those answers figured out, you can begin to research the various franchise opportunities that may suit your interests.
Choosing the Right Franchise
When it comes to choosing the right franchise to invest in, there are a few factors to consider. The most important factor is understanding the franchise’s business model and whether it will be successful in your area. It is also important to research the franchisor’s track record and the success rate of existing franchise owners in the system. It is also important to understand the upfront and ongoing costs associated with owning the franchise, the initial training and mentorship provided by the franchisor, and the ongoing support offered after the initial training period.
Purchasing a Franchise
Once you have chosen a franchise that meets your criteria, it is time to begin the process of purchasing the business. The first step in this process is to review and sign the franchise agreement. This agreement outlines the rights and obligations of both the franchisor and the franchisee. It is important to thoroughly review and understand this document, and it is highly recommended to have an attorney review it as well.
The next step in the process is to fund the franchise. Depending on the franchise, you may be required to provide a lump sum of cash or to take out a Small Business Administration (SBA) loan. It is important to understand the required funding needs before coming to an agreement with the franchisor.
Executing the Franchise Plan
Once the franchise agreement is signed and the funding is secured, it is time to start executing the franchise plan. This involves finding an appropriate location for the business, hiring staff, and marketing the franchise business. At this point, it is important to have a clear understanding of the franchisors’ expectations and goals for the business and to have actionable steps to reach these goals.
Franchise consultants can help aspiring franchisees research and purchase a franchise business. As members of the IFPG, our Franchise Broker Group has more than 1,300 franchisors, franchise consultants and vendor members who guide aspiring entrepreneurs through the process. Our goal is to help you find the right franchise business for your goals and lifestyle.