Understanding the Steps of the Franchise Process
Congratulationsllll You are looking at becoming a franchise business owner. Hopefully, this will be the beginning of a Discovery process that puts you on a path to business ownership. A leap from employee to employer...wow!!! A path that should be rewarding, life changing, and profitable. If you are reading this, it could mean that it’s a path you want to explore to see where
it leads. Maybe you are saying, “I want to look into this. I’ve always thought about owning my own business, but what do I do?” In other words,” What’s next?” Please take a few minutes and read through this quick and easy guide. It’s written in everyday language, not franchise jargon. You may find it to be very helpful. To make things simple, we’ve broken the process down
into a handful of basic steps. Every one of these steps is necessary, though some might be even be repeated more than once. They are designed to be a road map to get you from where you are to where yOu want to be. Remember becoming a franchise business owner is a process, and from beginning to end, the process generally takes from 4 to 8 weeks.
it leads. Maybe you are saying, “I want to look into this. I’ve always thought about owning my own business, but what do I do?” In other words,” What’s next?” Please take a few minutes and read through this quick and easy guide. It’s written in everyday language, not franchise jargon. You may find it to be very helpful. To make things simple, we’ve broken the process down
into a handful of basic steps. Every one of these steps is necessary, though some might be even be repeated more than once. They are designed to be a road map to get you from where you are to where yOu want to be. Remember becoming a franchise business owner is a process, and from beginning to end, the process generally takes from 4 to 8 weeks.
Step 1: The Introductory Call
Once you have indicated an interest in a particular brand, the franchisor will reach out to you to schedule an introductory call. Keep this in mind: You want to talk to a real live human being. Avoid a franchisor that simply wants to send you information via email. This is a major decision for not only you, but also for them. You need to be comfortable with the people with which
you are dealing, and you need to talk to them to find this out.
They should want to speak with you also, so the two of you need to talk to COMMUNICATE with each other. Communication throughout the process is critical. Open and honest communication by both you and the franchisor is really the basis for the entire process.
Depending on the franchisor, this introductory call can be somewhat informal or very formal. During this initial call, the franchisor will begin providing initial details about their brand. Keep in mind that investigating a franchise is a two-way street. Both you are the franchisor need to know about one another. You’re asked questions about your background, your skills, the
reasons for considering the franchise, what makes you successful, and what you are looking to accomplish. In turn, you will have a chance to ask questions and get to know the franchise better. The two of you should determine if the opportunity is a good match for you both. Remember, you are evaluating them, but they are also doing the same with you. They want the right person to expand their brand. If they think you are a fit, they will invite you into their process, which they should explain in detail before the end of the call. If during this discussion you decide that the opportunity isn't a good fit for you, feel free to express this. A good franchisor will respect your candor, thank you for your interest, and wish you well.
you are dealing, and you need to talk to them to find this out.
They should want to speak with you also, so the two of you need to talk to COMMUNICATE with each other. Communication throughout the process is critical. Open and honest communication by both you and the franchisor is really the basis for the entire process.
Depending on the franchisor, this introductory call can be somewhat informal or very formal. During this initial call, the franchisor will begin providing initial details about their brand. Keep in mind that investigating a franchise is a two-way street. Both you are the franchisor need to know about one another. You’re asked questions about your background, your skills, the
reasons for considering the franchise, what makes you successful, and what you are looking to accomplish. In turn, you will have a chance to ask questions and get to know the franchise better. The two of you should determine if the opportunity is a good match for you both. Remember, you are evaluating them, but they are also doing the same with you. They want the right person to expand their brand. If they think you are a fit, they will invite you into their process, which they should explain in detail before the end of the call. If during this discussion you decide that the opportunity isn't a good fit for you, feel free to express this. A good franchisor will respect your candor, thank you for your interest, and wish you well.
Step 2: Qualification
In this stage, the franchisor will gather more information from you and offer more specific details. Sometimes the early stages of qualification will begin with the introductory call. They typically will ask you to complete an application form which includes details about your background and your financials. Please note that you are not obligating yourself to buying a franchise by answering the questions or by filling out the application form. Franchisors use these forms to help determine whether or not they think you match their profile of a successful franchisee, as well as help discern if you are serious and have the funds to secure their brand. They want to ensure that you have the financial strength to not only purchase the franchise, but will also have access to working capital and living expenses while you are getting the business started. It's always important to remember that they
are looking at you just as much as you are looking at them and can say no to you if they do not think you are the right fit. Franchises are actually awarded at their discretion, so providing as much detail about your background, goals, and finances helps the franchisor to learn more about your stability and if you are similar to their successful owners.
are looking at you just as much as you are looking at them and can say no to you if they do not think you are the right fit. Franchises are actually awarded at their discretion, so providing as much detail about your background, goals, and finances helps the franchisor to learn more about your stability and if you are similar to their successful owners.
Step 3: Validation
Let’s take a step back and think for a moment, who would have the best possible insight into what it's like to own this business. The answer is two- fold. The executive management team will have a great deal of insight into the franchise overview, the history, strategic vision, business model, and available training and support. A very impOrtant part of the validation process will be your meetings with the executive management team. Just as important, however, is to speak with existing owners. Think about it. The
people who are already franchise owners of the franchise in which you are looking to invest are actually doing what it is you may be doing. A good franchisbr will provide you with a list of current owners and encourage you to do as much validation as possible with existing owners. Their insight into what it’s like to own the very franchise you are considering is invaluable. Ask
them what they did to become successful. Then, ask yourself if you can model that behavior. It’s also very important to ask about the training provided and ongoing support from the franchisOr. The most important question you can ask may be, “Are you happy with your decision and wouid you do it all over again?” It sounds like a basic question but the answer is fundamentally important.
people who are already franchise owners of the franchise in which you are looking to invest are actually doing what it is you may be doing. A good franchisbr will provide you with a list of current owners and encourage you to do as much validation as possible with existing owners. Their insight into what it’s like to own the very franchise you are considering is invaluable. Ask
them what they did to become successful. Then, ask yourself if you can model that behavior. It’s also very important to ask about the training provided and ongoing support from the franchisOr. The most important question you can ask may be, “Are you happy with your decision and wouid you do it all over again?” It sounds like a basic question but the answer is fundamentally important.
Step 4: Reviewing the Franchise Disclosure Document and Franchise Agreement
The franchisor will provide you with a document called a Franchise Disclosure Document (FDD). The FDD is a file comprised of 23 items that disclose variOus information that serve as a basis for further investigation regarding the franchise. It spells out terms and contains the Franchise Agreement. FDDs are uniformly organized to be the same in every state for every franchise opportunity. The FDD is usually a large file and can be initially somewhat overwhelming. Make sure any questions you have are
throughly answered by the franchisor. If you are more comfortable having the FDD reviewed by an attorney, a good franchisor won’t have any issues with that. One word of caution here: If you decide to have the document reviewed by an attorney, make sure that attorney is familiar with franchising. If you are going to pay for an attomey, it makes sense to use one that is experienced with Franchise law.
throughly answered by the franchisor. If you are more comfortable having the FDD reviewed by an attorney, a good franchisor won’t have any issues with that. One word of caution here: If you decide to have the document reviewed by an attorney, make sure that attorney is familiar with franchising. If you are going to pay for an attomey, it makes sense to use one that is experienced with Franchise law.
Step 5: Taking the Final Yes/No Decision
If you have gone through the previous steps diligently, you have done an outstanding job of examining what it takes to be successful as a franchisee for your desired brand. It’s important to note that as you get closer to the end of the process, you will experience intense emotions, including excitement, but also fear and anxiety. This is normal and quite common. A good franchisor will be aware of this and able to speak with you about it. The time has now come to put everything together and to use the information you have gathered to make the final decision. Over-analysis at this point can be as big of a mistake as not having enough information. You’ve done your homework, and if at this point you feel like you are making the right decision, you probably are. No one can guarantee your success, and don’t trust anyone who says they can. However, if all of the pieces of the puzzle
are there for you to be a successful business owner, don't allow fear to be the thing that stands in your wayll
are there for you to be a successful business owner, don't allow fear to be the thing that stands in your wayll