How do I start a franchise?
How do I buy a franchise?
those are common questions that our Franchise Advisors get from people who want to own a franchise, but just don’t know where to start. That’s what we’re here for. Buying a franchise can be a complex process if you don’t have a good Franchise Advisor walking you through the process.
With that in mind, we will demystify the franchise buying process into just a few simple steps.
1. Determining the right franchise for you – There are thousands of franchise brands out there, and it can seem overwhelming. These franchise models vary wildly in cost, revenue and complexity. You could own a work from home franchise where you’re the only employee, or you could own a multi-million dollar per year franchise with hundreds of employees. There are marketing franchises, food franchises, home improvement franchises, technology franchises, retail franchises, beauty franchises, health franchises, real estate franchises, education franchises… You get the point! There are a lot of franchises out there.
To help clarify what the right franchise is for you, read this article that gives you a few clear steps to find the industry and type of business you’re best suited for.
2. Making initial contact with the franchisor – This is the first step toward getting all the information you will need to make an informed decision about the franchise you’ve chosen. This typically consists of a short phone call where they interview you. They’ll ask about your background and what you’re looking for out of your new franchise. Then they’ll send you a brochure and schedule a more in-depth call when they’ll sell you on the features they offer.
Once this step is done, it’s time to move on to the more in-depth discovery that is very regimented across all franchise brands. *word to the wise, take note of how responsive they are during the discovery process. These are the people you’ll be working with for the length of your agreement term. If they aren’t responsive when you’re investigating becoming a franchisee, how responsive and easy to work with do you imagine they’ll be after you sign the agreement?
3. Franchise Disclosure Document Review – the Franchise Disclosure Document (F.D.D.) is a standardized document that is used by all franchises to disclose to potential franchisees all of the costs, obligations, terms, and potential revenues that are being offered with the franchise. This document consists of 23 different categories (called “items”). Once you receive the F.D.D., the clock begins ticking on what the franchise industry refers to as the “Cool Down Period”. The cool down period is a 14-day waiting period between receiving the FDD and being legally able to sign the franchise agreement.
During this period it’s wise to familiarize yourself with the document and what your obligations are throughout the term of your agreement (generally 5 to 10 years). Also important to know is what the obligations of the franchisor are. The document is truly meant to be mutually beneficial and it outlines the obligations of all parties involved.
For more information on how to read an FDD read this article: https://en.wikipedia.org/wiki/Franchise_disclosure_document
4. Discovery Day – Most franchisors offer some sort of structured visit to the corporate headquarters. This day is commonly referred to as “discovery day” because it’s meant to be an opportunity for you to discover what it’s really going to be like when you own your franchise. It also gives the franchisor the opportunity to discover whether or not they want to allow you into the system. It’s as much interview as it is a selling process for the franchisor. They need to make certain that you will have the capacity to run the business, and that you have the personality that will meld well with the existing franchisees as well as with the culture of the system.
During this day of discovery, you will meet the franchisor support and training team, see what your marketing plan will be, experience what your day-to-day life will be like as a franchise owner. It will also serve as an opportunity for the franchisor to extend the offer to have you sign the franchise agreement (or letter of intent if signing the agreement is unfeasible). The day is meant to be fun, but it’s also designed to paint a real picture of business ownership. Beware franchisors that show you exclusively positive things throughout your day. Owning a business comes with many variables – some good, some bad. That’s why there has to be some bad shown or discussed.
There you have it. It’s that simple. You could move through the process very fast and have your franchise agreement signed withing 15 days of initial contact, or you could take your time and wait months (or years) before you sign. The choice is yours. The average process takes 3 months from initial contact to signing day, but you have total control of the timeline.
There’s never been a better time than now to start your own business. This has been a very high level view at the steps that you will need to take in order to but a franchise. There could potentially be more steps depending on the franchise you're interested in.
If you’re ready to own a business, and you think you want that business to be a franchise, then you need to talk to a qualified Franchise Advisor. They will walk you through the 4 steps and help you make decisions that are right for you.
To speak to one of our Franchise Advisors call 866-587-5171, or visit www.RoofingFranchise.com.