Franchises are a popular and cost-effective way to make your entrepreneurial dreams a reality. But before you jump in, you need to understand the process of how to become a franchise owner. Here are the eight basic steps it takes to buy a franchise.
1. Initial Applications
One of the first steps to buying a franchise is to let the franchisor know you’re interested by filling out an application on the company’s franchise website. If you pass the initial screening, the company will schedule a meeting with a representative from the franchise, who will provide you with the Franchise Disclosure Document (FDD).
The FDD outlines relevant details about the franchise agreement including fees and responsibilities. It also outlines the history of the franchisor, including any legal and financial issues. You should consult with a business lawyer who will review the FDD with you.
2. Attend Discovery Day
The next step toward how to become a franchise owner is attending Discovery Day. This is usually an in-person meeting at the corporate headquarters where you can meet the franchisor’s leadership team. This is an opportunity for you and the company to evaluate each other. If both parties are satisfied, you will be given the franchise agreement.
3. Review the Franchise Agreement
The franchise agreement grants you the right to operate a business associated with the company’s trademark. It governs your rights and responsibilities, outlines fees and payments, defines your rights to use intellectual property. Before you sign this document, it is advisable to consult with a lawyer to help you understand what is expected of you in the agreement.
4. Build a Business Plan
Understanding how to become a franchise owner means knowing you need to develop a solid business plan. This will serve as a roadmap for your company operations and its path to success. This overview should include a menu of services the company will offer, a marketing strategy, a financial overview to cover expenses and when you should expect to start seeing a return on your investment.
5. Obtain Financing
Financing is a crucial step in buying a franchise. If you aren’t sure where to begin, the Small Business Association’s website provides a wealth of information on starting a business, including a section specifically related to funding options. If you plan to finance any part of your initial investment costs, your business plan will play a key role in securing funding from traditional lenders like banks or credit unions. A few franchisors offer in-house financing, but those that don’t often have partnerships with lenders and can offer a wide range of options.
6. Select a Location
A major benefit of investing in a franchise is that most franchisors have guidelines for you to follow, such as the amount of square footage you’ll need, average rent, etc. And, in addition to having relationships with trusted real estate brokers, many franchisors have also identified the best potential markets for growth based on detailed demographic data about their current and prospective customers.
7. Training
Franchisors typically provide both classroom instruction and hands-on training before you you’re your business. On-site training can be held at an established franchise or your new franchise location. The franchisor may also provide you with a mentor from the corporate office who will assist with the grand opening of your location.
Even after you open your doors, good franchisors will give you ongoing training in the form of webinars, on-site visits, and conferences. This ongoing education is essential to keep you up to date on new products or services as well as future advertising and marketing campaigns.
8. Open Your Business
Once you have completed all the above steps, it is time to debut your new franchise. Your franchisor will most likely offer you assistance in opening your new business. This will mostly be focused on promotional and marketing programs to make sure that you build your customer base quickly.
Final Thoughts
You should know that investing in a franchise does not take the risk out of starting a business. However, if you find the right franchise, you’ll be more likely to be on a path toward success sooner than someone who decides to go it alone.
The CareBuilders at Home Franchise Advantage
If you’re interested in a franchise in the ever-growing home care industry, CareBuilders at Home should be your top choice. We provide training, marketing, national advertising, and ongoing operational support. We also do something no other franchise in the home care industry does – we handle all the back-office assistance to franchise owners.
If you’re interested in hearing more, contact us and we’ll answer your questions and walk you through the steps of buying a franchise with CareBuilders at Home.
