How To Start A Franchise Business
The Franchise businesses have opened the gates for many young and upcoming Entrepreneurs who have the zeal and zest to operate a business but who do not possess the required attribute of expertise to begin a business from scratch. First, let us understand what a Franchise Business is about. In a Franchise business, a Franchisor (Seller / Brand owner) grants permission to a franchisee (buyer) to operate an established business in exchange for specified compensation and obligations in the Franchise Agreement. Upon the mutual consent of the Agreement, the Franchisor enables you to replicate the format of the business that is developed by the Franchisor (owner of the company) by you completely. Usually, the Franchisor assists the franchisee in the activities such as merchandising, marketing, finding the outlet, guiding them in the other operational areas of the business.
In a Nutshell, a Franchise business is nothing but the access to grant a license or permission to develop the established businesses with the existing brand name, trademark, patent, and with all the other ready-made templates before beginning the venture of a business. So if you are zealous about doing business but with minimal risk and manpower then the franchise business is the best option to move ahead with good ROI. Buying a Franchise business aids you in accomplishing your goal of business ownership and success. On the other hand, purchasing the correct franchise is not just like a walk in the park. It has many things that have to be looked after. Here, in this blog, we have enlisted the essential aspects that you must focus on before launching a Franchise business.
Self Examination: Identify your key area of interest before head starting a Franchise business. As there are several businesses out there in the market (Hotel and Chain Management, Educational Training Institutes, Groceries and supplies). Always choose a business type that aligns with your business goal. Think about how equipped you are to handle the franchise business when given an opportunity.
Though your Franchisor would help you out in Training and other vital aspects in operating the business, find whether you will have the individual space of thinking and will you be given the space to contribute your insights for the upliftment of the business. Finally, the most important element check whether you can afford the capital fee to get a franchise business.
Research: First, learn about your local market condition. Choose a Franchise business that would stick to your local market conditions so that you can have a good ROI. The most important thing while taking a franchise is to do thorough research about the brand in terms of their support, reliability, consumer’s perception, and ROI. It is important to check the reviews & recommendations by existing investors and Franchisees about the Franchisor in FranchiseReviews.in website.
Make a Business Plan: Having decided your Franchise business, write a formal business plan. The business plan includes capital investments, expense management, asset investment, purchase of office equipment, and profitability ratios. Having a clear idea of your business plan helps you to get organized and be prepared ahead of time.
Meet your Franchisor in Person: Prior to signing a Franchise agreement, there would be formal one-to-one meetings to get to know about each other. As a Franchisee you would be asked to visit the headquarters of the franchisor’s office for a meeting. In that meeting, you will discuss the specific and essential details of the business and the franchise agreement. Also, during the meeting take a mental note of how reliable the Franchisor is and whether the franchisor is ready to give you the required assistance to take up the business.
Review and sign the Agreement: After the one-to-one meeting, the next step is the signing of the legal agreement to take up the business. It is advisable to have a professional attorney by your side before signing the Franchise Agreement. Since the Agreement consists of clause and terms which are difficult to understand. Ensure that you are ready to be obliged with the terms and conditions that have been mentioned in the Franchise Agreement and then sign the document.
Know your Business Compliance Requirements: To begin a business certain norms are set by the local or state Government that is fulfilling the business compliance requirements. The compliances normally consist of general business licenses, occupational licenses, health permits, and tax registrations. In case if you missed maintaining any of these licenses it results in government penalty or fines or even worse than that. Chances are there where the Franchisor has the right to terminate your franchise if you fail to comply with the statutory rules.
Build your Business: Having complied with all the legal requirements to initiate the Franchise business. It is time to focus on building your business. Improve your office space according to business needs. Generally, the Franchisor would provide you with the complete custom fixtures and blueprints you can also improvise the business under the consent of the Franchisor. Also, the Franchisor helps in hiring qualified employees to run the franchise and also provide the complete training to the employees who have been newly assembled. You are required to assist them and handle the day-to-day running of the business efficiently.
Commence your Franchise Business: Having set your legal requirements and employees, before opening the franchise you must alert the targeted audience about the launch of your business. Also, over here the Franchisor would guide you with the necessary promotional activities and other ad initiatives to perform. Financial estimates of these promotional activities are predefined in the Franchise Agreement. A Franchisor may prefer for a Soft opening or Grand opening based on their business and personal requirements.
After fulfilling all these legal requirements and negotiations get set to start your business venture and ride through a profitable path through Franchising. Hopefully, on reading this blog you have got a clear picture of how to start a Franchise business.