Many people dream of starting their own business but hesitate due to a lack of confidence, experience, or both. Fortunately, the requirements to start a franchise are a lot less stringent than starting a business from scratch. Just about anyone can start a franchise, thanks to the franchisor’s support. This guide will help you learn how to start a franchise, regardless of your prior experience.
No Experience Necessary
You won’t need prior business experience or industry knowledge to start a franchise in most cases. Even if you don’t know how to start a franchise, the franchise company can provide training, guidance, and support for every step of your new journey.
This support means you won’t have to make many of technical decisions during your startup phase. The franchisor can streamline this process so you can get up and running as quickly—and profitably—as possible.
Decide on Your Franchise Type
The requirements to start a franchise vary by industry, so it’s important to choose a business that fits your interests and the community.
If you’re like most people, you might instantly associate the word “franchise” with a fast-food chain. But there are many types of franchises (in all industries) out there, including:
- Retail stores
- Convenience stores
- Vending machines
- Gyms
- Educational services
- Tax preparation and financial services
Of course, restaurants are still one of the more popular franchise types. Choose a business that interests you. After all, this business will become yours for the duration of the franchising agreement, so it’s important to select an industry that you’re passionate about.
Go through the Interview Process
While prior experience isn’t usually necessary to start a franchise, the company will still want to assess your readiness with an interview. During this process, the franchisor will evaluate your prior work history, current skill set, finances, and reason for investing in their company.
This interview may come before or after a company “discovery day,” during which you’ll have the opportunity to learn more about the franchisor. This gives you the chance to learn how the franchise works on a daily basis and make an informed decision about the franchising contract.
Write a Business Plan
What is a franchising business plan? A business plan can help you focus on the goals and objectives of the franchising company. A business plan is usually required when applying for any type of business loan.
A good business plan might include the following:
- A description of the business
- Market research
- Management structure
- Marketing strategy
- Financial projections
- Funding needs (if applicable)
The first page will also include an executive summary highlighting key points.
You don’t need to know how to start a franchise to create this document. The franchisor can provide you with much of the required data, such as the market research and plan.
Business Funding for Franchises
Every business requires funding to get off the ground or to expand its operations. Unless you’re taking over a location from a previous manager, you’ll need working capital to cover costs such as:
- Commercial real estate
- Training
- Supplies and equipment
- Marketing
- The franchising fee
Thankfully, the financial requirements to start a franchise are easier to satisfy than starting your own business. The U.S. Small Business Administration (SBA) offers loans geared toward franchisees, and the eligibility requirements are less stringent than other SBA loans.
Review the Franchise Agreement
Every franchisee will have to sign a franchising agreement, which is a contract between you and the franchisor. This agreement contains important details related to your geographic territory, business practices, and the length of time you’ll operate the franchise.
These details are important, so don’t be afraid to consult with a legal expert prior to signing and seek clarification on unfamiliar terms and details.
Training, Equipment, and Resources
Starting a new business can be scary, but with a franchise, you’ll have the stability that comes with an established corporation. Your franchisor can provide valuable guidance and support, including:
- Training
- Discounts on equipment
- Guidance on how to purchase supplies
- Marketing and promotional materials
This takes some guesswork out of the initial startup process and also lets you take advantage of a company with its own marketing team and nationwide advertising campaign.
Are There Any Franchises Near Me?
Use the locator tool at FranchiseOpportunities.com to find franchises in your area. Franchising can give you the flexibility you want, and the stability and confidence you need.