Starting your own business involves a lot of effort. You need to start from scratch and establish the reputation of your business before you can think of earning profits. However, franchising is a business model where you can start a business in the name of an already established brand. By using their brand name, you need not spend too much effort on brand building. This is a great option, particularly if you work with the top brands.
If the idea of starting a franchise business interests you, read on to know how to go ahead with it.
- Decide the business
The first thing, of course, is to decide the type of business you want to start. There are many franchise options available. For instance, you can open a franchise of McDonald, Subway, or Pizza Hut and run a successful eatery. If you want to be a part of the retail operations, you can look at opening a franchise of 7-Eleven or Carrefour.
Many of the top brands invite entrepreneurs to work with them as franchisees, however, you should not open a franchise because a top brand is offering it. The business activity should be something you are familiar with. Opening a KFC outlet when you have zero knowledge of how the food industry works is meaningless, so it is recommended to select a business area that you are familiar with and then move ahead.
- Contact the franchising companies
Many franchising magazines and websites will tell you about the franchising opportunities available with them. You can even visit the website of the company or directly contact them. If they already have a presence in your area, then you may not be allowed to open a franchise outlet in which case you. You can look at opening a franchise an outlet in some other nearby area. You should also look at the competitors in the area and open a non-competing franchise business. Contact different franchising companies then research the company and find out how their franchise model works. You can meet other franchisees to find out if the franchise model works well. Explore all options available before you decide.
- Do your research
It is very important to carry out market research. You need to understand the market in which you plan to open your franchise outlet. Research the brand’s popularity and acceptance in this neighborhood and work out if there is room for one more outlet in the area. Then research the company and find out how their franchise model works.
You will also need to find out the procedure involved and most importantly the costs as you may have to pay an upfront fee to the franchising company. You need to find out all the expenses that you would need to incur. In order to avoid unpleasant surprises find out everything in advance, including the profit percentage to be shared.
- Complete formalities
You need to sign an agreement with the franchising company once they approve your application. You then need to rent or lease a building where you will run the business. Typically, you will also be required to start your own company, in order to enter into an agreement with the franchising company. Complete all legal formalities, including obtaining licenses from local authorities and if you need financing, then the franchisor may be able to help you get a loan, otherwise you can apply for a loan from a bank.
- Start the franchise
To start the franchise outlet, you need to ensure the outlet is ready for operations. This includes construction work, interior décor, hiring employees, and training them. The good part about this is that by going down the franchising route the franchisor will help you with all of this. You can then do marketing activities in your location and then launch your businesses. Remember that you will get assistance from the franchisor at every stage so your risks are mitigated.
Franchise business was an unknown term few decades ago. However, with the arrival of multinationals and opening of the global economy, the term has gained prominence significantly. Today there are thousands of franchise businesses running successfully throughout the world.
A franchisee model is indeed a cumbersome job. Right from signing the contract with the franchisor until the inauguration of your store involves lot of paper work and legal hassles. Given the amount of corruption involved in our country, a person planning to take the franchisee route has to shell out a fortune to make things work without impediments.
With all the hard work involved, it is an uphill task to open a franchised outlet of any brand , however, the result is very rewarding since the hard work can pay off. Of course, not every franchise model succeeds in its endeavour and there has to be intricate planning and execution right from the beginning until the end in order to make it a success.
There are several brands world over offering tailor made solutions to open a franchise business. Multiple franchise models can be created for a leading brand within the minimum possible time