10 steps to starting a franchise

Investing in a new business is a serious proposition. It deserves due weight and consideration. We can’t make it easy, but we can help make it simple with the 10 Steps To Starting A Franchise guide.

Determine your capital availability

Much like buying a house, franchises are available in most all budgets. Determining the price range that you’re comfortable investing in will help narrow the field to determine the best franchise for you.

Money to invest in a franchise
A Franchisee at his Brick and Mortar business

What type of franchise do you want?

Its not yet time to look at specific industries or specific brands yet. For now, concentrate on the fundamentals that are important to you;to do you want B2B or B2C business? Would you like to employee a large staff, or have a smaller operation? Are you interested in the concrete feel of a brick and mortar business or the flexibility of a home-based operation? Can you commit full-time efforts, or do you need to look at something that is passive/semi-passive?

Are you going to engage help in the investigation process?

Franchise brokers and coaches can be an invaluable resource to many people. They help you perform object evaluations of your interests, life goals, and investment and ROI requirements. However some individuals prefer to handle the entire research process themselves, or even engage multiple specialists for developing funding plans, strategic plans, and a business plan.

A man researching a franchise
Meeting franchisor

Begin your initial research

There are many ways to narrow down your search. Working with a coach is one. We have an answer on Quroa that talks about another approach

Engage with franchisors

Once you have narrowed the field, engage with brands you are interested in.
Get an understanding of:

  • A day in the life of a franchisee
  • What the expectations of the franchisor are
  • What you can reasonably expect from the franchisor
  • What their evaluation process and qualifications are
Prospect_meeting_with_franchisor
Franchise Due Diligence Checklist

Begin your due diligence process

Your diligence process is where you narrow the field of prospective franchisors. It should include:

  • Reviewing the Franchise Disclosure Document
  • Industry and competitive analysis
  • If appropriate, visiting a local franchised location

Evaluate your funding options

You may find it helpful to meet with a funding expert. Prospective franchisees have many options available, including SBA loans, lines of credit, rolling over investment funds, and others.

Line up your franchise funding
Franchisae Discovery Day

Meet the franchisor

Attend a discovery or confirmation day. Pay attention to the small details that can reveal many things about the franchise operations. Make sure you meet the key members of the team that you’ll be working with for the next 5-15 years (or longer!). This should be a mutual interview, and no questions should be left on the table by the end of this day. You should walk away from confirmation day knowing if this is the right fit.

Join the team

Once you feel you have found the right business for you, execute a franchise agreement and begin your new journey!

Signing a franchise agreement
Franchisee Grand Opening

Build your business

Don’t let a day go by where you haven’t done something to work on your franchise. Stick to your business plan and the franchisor’s operations manual.

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