There are many ways how to start a franchise, but not all advice is created equal. If you are looking for an opportunity to earn extra bucks, starting a franchise may be for you. And don’t worry, you’re not the only one to think of this idea.
Franchising, to be brief, is where a significant company offers individuals a chance to open up a branch in a specific area. While individuals can run their unit on their own terms, it comes with several benefits. For one, they do not have to worry about starting a business from scratch – which is where most aspiring business people struggle in the first place.
Why start a franchise in 2022
Starting a franchise can be a new way to flex your entrepreneurial muscles. It may not be an easy job, but the long-term payoff makes it a great choice. If you have mastered the art of opening a franchise, then opening branches should be a walk in a park. Don’t worry if you don’t have the skillsets for it. Companies will provide training and other sessions to make your business work.
And it’s a great time to invest in franchises too. The franchise industry is thriving in 2022 after two years in a pandemic. With this, companies are beginning to realize that if they offer better programs to start a franchise, then they can encourage more people to open up and start a franchise.
Choosing to start a franchise brand has several advantages. For one, starting a franchise is a good way for novice business people to get a hand in entrepreneurship. After all, it already provides plans for the business model. This is usually done through initial investments, branding and marketing growth, and built-in systems and models to reach candidates.
How to choose the right franchise
The key on how to start a franchise is knowing which company to invest in. After all, owning a franchise is not a one-time big-time decision. Instead, it’s a long-term responsibility that will have serious financial repercussions. With that, franchisees should do their research. For example, you need to check the franchising process in the company, how the company supports its franchisees and the terms of the franchising deal.
Since everyone’s personal preferences are different, you can also ask these questions:
- What are my personal and business goals?
- What industry do I want to break into?
- Is it beneficial for me to break into this industry in terms of my strengths?
- How involved am I going to be in the business? How long do I want to be committed to the franchise?
- What is my starting investment budget?
Plus, here are some other questions to ask yourself when opening a franchise.
Opening a successful franchise is difficult. However, it does pay off if you are familiar with the industry you’re in and if you have the right people to guide you through it. When deciding to open one, you should also ask if you are the right fit.
Franchise owners need to decide if they will be running the branch daily or hire staff to do it. For instance, depending on your franchisor, you can either get hands-on jobs or stick to management. Learning which one is the best will help you make wonders in your business.
That being said, here are some green flags that can indicate you have chosen a good company.
- Strong, well-established franchisee system
- Company’s tone and professionalism
- Good online reviews from other franchisors
- Investment in prospective candidates
- Successful sales and business model
Steps in starting a franchise
Now, on to the juicy part. Here’s how to start a franchise in five steps.
Choosing a franchise
Using the questions provided earlier, try to choose a franchise that best suits you and your background. It helps immensely if you actually like and are familiar with the industry you’re getting into. Selecting a franchise also means that you should evaluate different franchise opportunities. You can try to find data on how the market is doing in government agency websites, business schools, or private market research firms.
Get funding
Let’s face it: starting a franchise can be a pain in the pocket unless you have a massive amount of wealth lying around. It goes without saying that you need capital to get your business going. You can ask your franchisor if you can get a business loan to start the franchise. If not, you can gather money from family and friends or through banks and financial institutions.
Review the contract, check the requirements
Once you have made up your mind about a certain company, you get the go signal to sign the contract. Obviously, you would have done your research on the business at this stage. This also goes for being aware of the various licenses and permits you need before doing business in an area. If you fail to get these documents, it often leads to government fines and other challenges.
Optimize your location, train, and hire staff
Of course, when you start a franchise, you’ll get some help along the way. That being said, franchisees are still mainly responsible for building and maintaining their space. You also want to create and train a team during this time to prepare them for the opening.
Open your franchise
It’s time to introduce your franchise to your community. If you have business networks in the area, then it’s time to invite them and throw a huge event. This will not only help you get the boost you need, but it will also help your business be known to many. You want to make sure that your branch is in tip-top shape before opening. But the work only starts on the opening day of course. In the long run, you have the hefty task of improving and maintaining the business.
Well, there you have it. That’s how to start a franchise in 2022.
Starting a franchise can be a scary decision to make. But this year, franchisors are stepping up their game to get prospective franchisors, so you can get the support you need should you decide to open one.
