If the bug has bitten you to take your business skills to the next level, franchising is an ideal marketing strategy. Acting as a third-party franchisee to sell products and services of top-performing umbrella companies can help you maximize profits within no time.
Owning a franchise business can add a feather to your cap if you’re serious about becoming your own boss. Becoming a successful franchisee for companies like KFC, McDonald’s, or Pizza Hut is no child’s play.
Read more to know the best tips and tricks to start your own franchise business.
Research and Self-evaluation
According to the ADP National Franchise Report 2021, franchise employment in the US has seen an increase of around 57,700.
Understanding your own needs and goals is the first step towards becoming a profitable franchise owner. The reputation of your business largely depends on the parent organization and its entire network.
Hence, complete research about your interests and understanding the business methods of similar companies is essential. Self-evaluation also involves arranging the finances and expenses to establish a successful business model.
Select a Franchise Broker
A franchise broker or a consultant has industry-specific knowledge about the entire process of starting a franchise business. If you’re serious about becoming your own boss, it is imperative to approach the right agent to guide you through the right path.
A franchise broker will help you in the following ways:
- They will help you connect with suitable franchisors.
- They can provide details about money lenders and financial institutions.
- They can support and guide you to find the right location for your store and gather the inventories.
Once you find a potential franchisor, the next step is to send a request with a franchise application form. If you are selected, the company will send you a Franchise Disclosure Document (FDD). It gives details about their products and services.
Attend a Franchise Discovery Day
Attending a discovery day is highly beneficial for both the franchisor and the franchisee. It helps them meet each other on a personal level.
As a new franchise owner, you can understand the company’s business operation, meet the staff, and know about company-specific policies.
A discovery day also helps you meet other franchisees and gives networking opportunities.
Sign the Franchise Agreement
A franchise agreement is the most critical document shared between the main brand and the third-party sellers.
Some of the key terms that are covered in the contract are:
- Payment terms and provisions include an initial fee, management fee, and advertising fee
- Term of contract
- Trademarks and copyright details of their products and services
- Guarantee details from the franchisee’s side
- Accounting and business deal records
- Information about employees
- Details about the store property and premises
- Non-competition restrictions after termination
Check for Permits and Insurance Details of the Franchisor
Each industry in the US operates under state-wise rules and regulations. Each company will have legal permits and insurance policies according to the rules of the government.
It is essential to check authorized websites like FindLaw to check if your franchisor complies with legal laws in your state.
Hiring and training skilled staff to run your operations is the final and most crucial step to start your franchise business.
Hosting a store opening event can help you create positive brand awareness and attract potential customers to your company.