Start a Franchise Business

Edited by Nerissa Avisado, Lynn, Eng


It takes a strong will to make it and stay in business. Start-ups sometimes remain just that and eventually close shop. Those who make it have to contend with the big names in the same niche. If you are not keen on taking chances as a newbie in a new product, there is another way to start it almost right in business, the franchise model. With this set-up, you have hurdled almost a third of the requirements for establishing a business and promoting it. It is not guaranteed to be for everyone so take time to learn how to start one.

  1. 1
    Evaluate your resources
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    Understand what kind of business you would like to be in so you can identify what franchise to buy.
    1. Look at your financial capability and possible additional resources like real estate loans.
    2. Make an inventory of your skills, talents and interests. Are you a foodie and great at creating or serving them?
    3. Do your hobbies tend to lean towards arts and crafts? Do you love to tinker with gadgets? Each type of franchise require different resources.
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  2. 2
    Do an intensive research on a franchise
    1. Start your search with business magazines offering directories of franchises, big and small. Identify and take note of your choices.
    2. Visit websites of top franchise businesses and the interesting upstarts. Understand their business products and services and try to see where you can be a true fit. Select your favorites.  
      1. Get in touch with franchisers of your choice by mail or phone. Request an appointment with their representative.
      2. You need to know about their philosophy, strategies and annual returns.
      3. You also need to inquire important requirements like investment type, property and infrastructure, statistical data on operations and support like training and marketing.
      4. Do not forget to take notes in order to aid your decision-making.
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  3. 3
    Study the business plan against the data gathered
    Prepare your estimates of investment costs and projected returns and incorporate them into the business plan. Understand each component and try to see if this is the business you really want to run. Go back to the representative, if need be, for more discussion on grey areas.
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  4. 4
    Meet with existing franchise
    Discuss with them what you have researched, so you can clearly see what you could achieve. They will give you strong insights on what is really happening on the ground. This will aid you to form better expectations.
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  5. 5
    Hunt for the perfect location for strategic business promotions
    1. Contact real estate brokers or search in the local news or magazines and the internet. Identify areas where you would want to be located. Prioritize properties advertised and make a list.  
      1. Visit the various areas you have selected and observe them for several hours at different times of the day on different weather conditions, to get the actual feel of the areas.
      2. Take note of the following questions: Is it accessible? Is there enough traffic there to encourage walk-ins? Is it near institutions and events areas? Who are the neighbors? Is competition stiff? Is the original structure interesting?
      3. Will it fit the infrastructure and location requirements of the franchise? Will renovation costs be reasonable? Compare them on these points.
    2. Talk with owners or their agents to find out costs of the lease for a year and what their requirements are. They could also be sources of better locations.
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  6. 6
    Study the contract and other legal requirements:
    Talk to a lawyer for better understanding of the consequences
    It is a good precaution to ask for clarification from the franchiser.
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  7. 7
    Finalize other requirements
    1. Raise the investment capital. In addition to your ready cash, you need to seek additional capital from possible partners and other investors. If you don't want to have partners, go to financial institutions. Bring your business plan to them, presenting it with the aim of seeking a loan.
    2. Finalize the location and enter into a longer lease with the owner.
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  8. 8
    Once you have everything in place, sign the franchise contract
    Be sure to ask a lawyer to review it before attaching your signature. Once again, before signing, ask from the franchiser clarification on all grey areas and ensure these are fully addressed in the contract. Now, you can start preparing to run your own business.
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  9. 9
    Start to run your business
    1. Order all the necessary equipment for the daily business. Furnish your store in accordance with franchise guidelines.
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  10. 10
    Interview and hire employees to help you run your business
    Let them undergo the training so they fully understand the business strategy and ensure strict adherence to procedures.  
    1. Order your first inventory.
    2. Advertise your opening. Avail of the marketing support of the franchiser, but do not solely depend on it. Do your own promotions on social media and in local papers.
    3. Open the franchise business and start earning from your investment.
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Franchising as a business model has helped business owners reach more customers and rake in profits. The established brand guarantees customers. Greater profit is so possible because of lower costs on materials and supplies. There is a high rate of success through application of tried and tested business models. Operation and management practices have almost been perfected and advantageous to the new franchisee who herself will be trained to develop or hone her business sense. Because of the bankability of the franchiser, the franchisee can easily acquire recapitalization approval.

Challenges of a Business Franchise

However, it is not smooth sailing because remember, you have to deal with the owners who you might see to be imposing their decisions on you. There could be possible conflict lurking and ready to explode if it's not nipped early. Franchising is not sole proprietorship. When you enter into it you bought the franchiser's guaranteed customer recall, initial training and ongoing support to stay in tune with the business industry you have chosen to be in. In exchange, you have to deal with the franchiser doing everything to protect established systems. However, you can turn these setbacks to your advantage and continue to run your business and rake in profits.

If you have problems with any of the steps in this article, please ask a question for more help, or post in the comments section below.


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Categories : Noindexed pages | Financial

Recent edits by: Lynn, Nerissa Avisado

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