Starting a franchise business is a very different process to starting an independent business. At FranchisingWorks we often find that one of the main barriers for people to get started is lack of clarity on what they need to do to prepare. We also often meet people who have suffered from not completing a thorough preparation process, resulting in difficulties once they get started in their franchise business.
Everybody’s journey will be slightly different, depending on your particular circumstances and interests. However, there is a common set of actions that will need to take place before you are ready to get started:
- Identify what you want from the business. Inclusively, know your ‘screening criteria’, such as budget, the geographical area that you want and the minimum amount that you need from the business to live off.
- Find options that are feasible (meet the above criteria) and that excite you. Think: are they a good business option? A good franchise? A good personal fit?. Go through their website and prepare questions.
- Contact the Franchisor directly. Ask the franchisor about territories and cover any initial viability and other headline questions. Don’t forget to SELL YOURSELF to the franchisor first and foremost at this point.
- Meet franchisors face to face. Ask some more of the in-depth questions to evaluate the information and the people (free list of suggested questions available from FranchisingWorks). Ensure that you understand the financial model of the business in detail and the TOTAL investment amount required.
- Research the industry(/ies) and the trends, market and competition in your proposed territory. Does the business model apply effectively in the area?
- Speak to franchisees in the franchise network. Find out about their experiences, and check that the financial assumptions in the business model match their realities.
- Test the financial model, checking sensitivities and assumptions. Tailor the model to your circumstances, including investment sources, additional start-up costs, loan repayments and your personal drawings.
- Understand the Franchise Agreement and its key terms. Ask the franchisor any questions around areas that need clarity. Identify a BFA-Affiliate Solicitor to review the agreement for you.
- Write a business plan using the information that you have gathered from the above steps. Ensure that it meets the requirements of any lender that you are going to (you may need to ask professionals for help here. FranchisingWorks does this for individuals on the programme for free).
- Gather any other documentation required for funding applications (ID, proof of address, bank statements etc) and make applications to funders.
- On receiving all of the finance that you need, sign the Franchise Agreement and book on a training course.
- Go on your training course with the franchisor – and launch!
FranchisingWorks can support people on the programme with free materials and one-to-one guidance and support through each of these steps into starting a franchise business, so don’t worry! You won’t be alone.
To start on your journey into franchising, book a workshop with FranchisingWorks by calling 0161 408 1313 or online here.