Each year, thousands of entrepreneurs realise their dream of independence by starting a franchise. However, becoming a franchisee is not an easy task and choosing between thousands of franchise options can be a daunting prospect. If owning your own franchise tempts you, you’d better keep the following points in mind!
Step 1: Make a personal assessment
Before taking any action, it is important to focus on your personal and professional needs. This allows you to be clear about your motivations, skills, know-how, strengths and weaknesses to see if your professional goals are compatible with your personal life.
Step 2: Choose your industry
Pick an area that you have an affinity for, whether this is food, fitness, insurance or something else. After all, the more you enjoy something, the more motivated you will be to persevere. This is the opportunity to be your own boss, to satisfy your passion, and to move in different directions. Learn about the skills you will need because extra training is sometimes necessary, especially if you go for a technical profession.
Step 3: The financial input
It is crucial to have at least the minimum capital required. If not, review any loan options, whether this is from banks, private investors, government or family and friends. Some brands require no personal contribution; others will require you to pay entrance fees, royalties, advertising fees, etc. These are 3 types of franchise:
- Business format franchises
- Product franchises
- Manufacturing franchises
Step 4: Select your franchises
Identify companies and do some research on them. Collect information on the Internet, at trade exhibitions, in news magazines, etc. Assess the chances of your success at each of the franchisee networks. Take time to investigate and never hesitate to meet franchisees of a brand for their testimonials. After signing the franchise agreement, you will establish a partnership for five to seven years.
Step 5: Elaborate a business plan
This is essential to assess the feasibility of your project and your chances of ROI (Return on Investment)! It includes an executive summary, market research and financial forecasts over a specified period (3-5 years). This document is for your franchisor which will let them know if you can cover the costs of the enterprise, ensure repayment of your loans and make a profit.
Step 6: Choose the location of your site and your legal status
Think about visibility, traffic, competition… A strategic choice to make! Also remember to decide your legal status (Ltd, EURLs, etc.). Several other criteria are also important (financial requirements, tax system, etc.). Get advice from an accountant.
Step 7: Join a franchise network
Ready to get started? All that remains is the signature of the franchise agreement.
This document commits you to accepting a number of obligations to the franchisor, and vice versa.
The most important aspect is the trust that you need to have in the franchisor. At the end of the day you need a good, if not great, relationship with your franchisor to be successful.
Chopstix Group have a comprehensive franchise support programme in place, including our online business management Enterprise Resource Planning (ERP) software aptly entitled ‘Noodles’, to ensure our franchisees are set for success. We provide trainee programmes and total business and marketing support for our franchisees. They are a part of our adventure and we believe in every member of our team. After all, their success is our future.