Did you know that over 8 million Americans work in 750,000 franchises across the nation?
There’s a reason why the franchise model is so popular — it works! Aspiring entrepreneurs have good reason to consider buying a franchise rather than starting their own brand from scratch.
Is a franchise the right choice for you? Before you buy a franchise business, you need to understand exactly what you’re signing up for. Keep reading as we cover the basics of buying and owning a franchise.
Understand the Business Model
A franchisee is an individual (or group of persons) who applies for the right to do business under an established brand’s name and system. The owner pays start-up costs as well as annual royalties or licensing fees to the brand.
In a nutshell, franchise development gives entrepreneurs a ready-made, turnkey business to open. The procedures, processes, and branding are already in place and consistent across all franchise locations.
Think of Dunkin’ Donuts, 7-11, or Anytime Fitness — customers walk into any location and know exactly what to expect.
Research Popular Franchises
If you feel physically, emotionally, and financially up to the challenge, it’s time to decide what kind of franchise you’d like to open.
Whether you’re planning to start a Baskin Robbins franchise or similar to that kind, make sure to do your research. Do your due diligence and investigate:
- Overall sales history
- Past growth & future growth potential
- Local competition
- Opportunities for repeat customers
- Franchise fees & startup costs
The best franchise business for sale will have a proven track record of success as well as plenty of opportunities for growth.
Start the Application Process
Once you’ve weighed the pros and cons and found a suitable franchise, it’s time to apply to become a franchisee. You may wish to hire a franchise attorney to guide you through the next steps of the process.
The franchisor will go through a “screening” that considers your financial status, education, and work history. They’ll also want to know why you want to open a franchise with them, where you plan to operate, and how much you already know about the company.
If you get the green light, you’ll need to apply for financing to cover the startup fees and royalties. Once you’re approved, you can move on to the final (and most exciting) steps.
Find Your Location & Receive Training
If you haven’t already, now’s the time to go out and find a suitable location to open your franchise. Make sure the space you rent or buy is zoned for commercial use.
At this stage, it’s time to fully immerse yourself in the company culture. Before you open your store, you’ll receive training in all the products and services, as well as branding, product placement, and payment technology.
Successfully Buying a Franchise
As we’ve discussed, there are many benefits to buying a franchise business. Do your research, keep your eyes open, and make sure you understand everything that goes into owning a franchise.
If you do, you’ll be well on your way to becoming a successful business owner!
Now that we’ve covered franchise basics, what’s next? Our site has more stellar business advice waiting for you, so stay right here and keep browsing.