The road to opening a franchise is multi-step process. Here are 10 steps that outline the process becoming a franchisee.
1. Understand how franchising works!
2. Examine your own motives, temperament, lifestyle preferences, health, family obligations, likes and dislikes to be sure you are realistic about undertaking a particular type of business.
3. Know what your own financial situation and objectives are to determine if franchise ownership is a viable option for you.
4. Establish a business relationship with an accountant to review your finances, and a lawyer with specialized experience with franchising to review the legal obligations involved in franchise investment.
5. Look for franchise industries that match your requirements and preferences. When you have a list of candidates, compare several similar opportunities within those industries to narrow down your choices. Talk with other franchisees to get a hands-on practical viewpoint on the pros and cons of the business.
6. Do the research on the industry, the market segment, and competition in your specific area.
7. Contact the franchisor and request the Franchise Disclosure Document (FDD). Carefully examine this with your accountant and lawyer to assess the business proposition and its earning potential.
8. Write a credible business plan to present to the franchisor and potential financial lenders.
9. Find an appropriate location based on your target market, the competition and capability to meet any site requirements stipulated in the FDD.
10. Carefully review the Franchise Agreement with your accountant and lawyer to ensure it matches the FDD. Make sure you understand all the terms, and see if any of the terms can be altered and made more favorable for you as the franchisee.