A franchise can be a great way to start your own business from a well-established brand. This type of business is generally immediately profitable since the company is known to customers worldwide.
Running a franchise can be challenging despite the business having an established company reputation. However, if you have the money to invest in a franchise and desire to own a business, becoming a franchisee is the best path to take. Here are the steps to becoming a successful franchisee.
Establish a personal balance sheet
Starting as a franchisee is not a decision to take lightly, so it’s better to consider it beforehand. For this, the personal assessment is an excellent tool. But what is the question under this rather strict term? See this as a phase of introspection, after which you will be more able to make your decision knowingly. Concretely, you will have to focus your thinking around two axes:
The Human Side
The enthusiasm of starting a business can make you grow wings and put you in a “tunnel vision” situation: you think of nothing else than that, which can mislead you. Ask yourself several questions about your motivations and your skills. Here are some examples to help you get started more easily:
- Why become a franchisee?
- Am I ready to change my habits?
- Can I invest alone in this adventure, or should I call someone else?
- Do I have the will to create from scratch? On the contrary, do I favor entrepreneurship within an existing framework?
- Am I able to challenge myself easily?
- Is becoming a creative and business owner currently compatible with my personal life?
- What are my needs in terms of salary? Where do I see myself in five years? Ten years?
Once you have thrown enough questions on the table and found an answer to each, do the same for the second part.
The Business Side
Again, take the time to ask the right questions and find the answers in yourself. Once is not customary, here are some tracks:
- Do I have expertise in a field of activity?
- Do I have a particular appetite for specific areas of activity?
- What are my strengths from a professional point of view?
- What skills do I lack?
- How can I get help on the points listed in the question above?
- Am I able to run a business alone?
- Do I want to become a franchisee in a field of activity I already know? Start from nothing?
- Recruiting and managing employees, does it seem possible for me?
From the moment you have answered all your questions, and none of the answers is crippling in the context of your project, it is because you are ready for the second point.
If you have difficulties completing this first step, getting help from various organizations such as the Chamber of Commerce and Industry is possible. These organizations can help you in this process.
Determine the business sector
Become a franchisee, yes, but in which sector? If a priori is a natural point at first glance, it still deserves to be deepened to avoid unpleasant surprises. Since you are in a professional approach, you must focus on your career in work.
To be clear about its financing capacity
If creating a franchise can provide several benefits, it does not mean the creation process is free. Franchising already requires entrance fees to the network of franchises you join: between $5,000 and $100,000. These expenses are mainly used to compensate the franchisor, which must, particularly, amortize the costs it will generate to help you start your business. Apart from the most expensive franchises, it is rare for the price to exceed $100,000.
However, other elements can drive up the addition: the stock needed to start the activity is an excellent example that should not be underestimated. Do you think you do not have enough personal funds to get started?
So do not hesitate to make an appointment with your banker to tell them about your project, present your business plan, and possibly apply for a professional loan to get you started. The latter will probably ask you for a personal contribution that can be significant. You can also ask for help from family and friends if you cannot raise this amount.
Find the right franchiser
If the previous points are settled, you must find the franchisor most relevant to your project. Limit yourself to the actors in the field of activity you have chosen: this will save you from having an endless list to deal with.
Then comes the contact with the various franchisers interesting you.
One element you need to recover from all your interlocutors is the DIP (Precontractual Information Document). You will find beneficial information for your reflection in this document, such as financial elements, networks, or the extent of its market.
As the franchisor provides this information, do not hesitate to compare it and cross-check it with other sources to ensure the transparency of your potential partner.
You can buy balance sheets from other franchisees in the network to understand the opportunities and risks of becoming a franchisee for this business. Tip: The list of all franchisees is included in the DIP. Attention: a franchisor urges you to sign a contract quickly, or you dazzle benefits that seem disproportionate?
Stay on your guard and pay close attention to his DIP. Do not hesitate to leave searching for returns from other franchisees, allowing them to have objective opinions. It is not uncommon for franchisors in financial difficulty to rally most business creators to their network to keep their business afloat. In this case, run away.About Complete Controller® – America’s Bookkeeping Experts Complete Controller is the Nation’s Leader in virtual bookkeeping, providing service to businesses and households alike. Utilizing Complete Controller’s technology, clients gain access to a cloud platform where their QuickBooks™️ file, critical financial documents, and back-office tools are hosted in an efficient SSO environment. Complete Controller’s team of certified US-based accounting professionals provide bookkeeping, record storage, performance reporting, and controller services including training, cash-flow management, budgeting and forecasting, process and controls advisement, and bill-pay. With flat-rate service plans, Complete Controller is the most cost-effective expert accounting solution for business, family-office, trusts, and households of any size or complexity.