Want A Thriving Business? Learn How to Buy a Franchise!
Many people think of business owners as professionals who start their own companies. While this may be true, there are other kinds of business owners as well. Franchisees are often left out when it comes to business owners. Just because a franchise is under a larger company, doesn’t mean a franchise owner isn’t a business owner also.
Before buying a franchise it’s a good idea to learn about what you may be getting yourself into before you jump the gun and actually do it. Before signing and making the investment, read our guide to help you expand your knowledge of franchising opportunities and how to get involved in a franchise. When you purchase a franchise, it still allows you to become a business owner without the difficulties of starting your own small business. Starting a franchise might not be as simple as popular video games Madden 15 or Madden 25, might make it look.
The Franchise Model
Exploring franchising opportunities also comes along with knowing how a franchised business works. A franchise business model encompasses a franchisor and a franchisee. In order to be a successful franchisee, you need to realize that you are not technically the entrepreneur. You are essentially just purchasing a license to use the systems, trademarks, logos, and software of the business. Some franchises make a turn for the worst and others thrive. It is critical that you know what you are doing before risking your money.
Questions to Ask Before Committing to Buying a Franchise
When thinking of the possibility of opening a franchise, you will probably have a lot of questions that you need answered before making the decision.
Does buying this franchise require experience or training?
Are there specific skills that are required by the field or franchisor? For example, if you wanted to open up an auto franchise, do you need to have experience working with cars or have specific licenses?
Why do I want to buy a franchise?
Maybe you like the idea of having someone else telling you what to do, but still want to be your own boss. Or maybe you just really like the brand or company. Determining your intentions for opening up a franchise is important to consider when you are thinking about starting a franchise.
Am I buying the franchise by myself or with a business partner(s)?
Financing a franchise can cost a lot of money, as you would expect. Before buying a franchise you should think about whether or not you have the funds or a loan to start a franchise independently, and if you want to take full responsibility for the business. Having a partner allows you to split costs and responsibilities.
Can I let someone else determine the way the business runs?
Since you would be buying a franchise, you don’t always get to create the set of rules and regulations that your employees need to follow. There are limits usually made by the franchisor as to what you can do with the business. Buying a franchise is great for those who don’t wish to create and write out a business plan themselves. As a franchisee most often you will follow the general guidelines and plans of the franchisor.
How many hours am I committed to working?
If you are wondering how to start a franchise, you need to be ready to commit and lot of time and energy into starting the business. As a franchisee, you need to be prepared for more than the typical 9-5. If you choose to train employees, manage the business, or take care of problems that will require a lot more time.
How much is the franchise worth?
When you are not buying from a well known chain, you must consider the worth of the business and the franchise before you pay way too much for a franchise. Some business owners think the value of their business is more than it is worth. So it’s important to know all of the facts about the business.
Can I manage my franchise?
Sometimes franchise owners decide to manage their own businesses and sometimes they hire a team to train and direct other employees.
How to Start A Franchise: First Steps
Picking the Right Franchise
Before buying any franchise you must think about what kind of business interests you. Do you want to shoot big and become the next owner of a famous wing restaurant chain like Buffalo Wild Wings or Wingstop? Or would you rather open up a hotel chain, courier franchise, gas station or a fitness gym chain? Figuring out what you want to sell becomes one of the biggest obstacles, since there are so many possibilities. When you decide which franchise to buy, you have to recognize that like any investment, it has the chance to fail. Just because you might be selling something that is associated with a well known name, doesn’t mean guaranteed success.
What do I have to invest into a franchise?
In order to use the name of the franchisor, you will have to pay various fees before opening shop. Other than time, you need a substantial amount of money and resources to open up a franchise.
To first start a franchise, most will pay franchising fees that can be anywhere from thousands of dollars to hundreds of thousands of dollars. In addition to the franchising fee you might be responsible for buying inventory and different insurances and licenses. Depending on the franchisor, you may have to continually pay a royalty payment of your gross income. Most of these royalty payments last for the duration of the agreement.
It might go without saying that when franchises open, a lot of dedication, hard work and time was put into the business. If you are looking into opening a franchise, you should probably ask yourself if you have the time needed to start and maintain the franchise.
How to Buy a Franchise
Are you ready to actually start the process of buying a franchise? It might be a good idea, if you are new to this, to meet with a franchise broker so that you can safely and intelligently decide on the franchise and go through the correct process. Brokers will help you complete paperwork and applications and help you to explore the different opportunities that best suit you. If you know enough about buying a franchise from franchise expositions, reading magazines, and searching the web it is not necessary to use the help of a broker. Get yourself your own copy of the franchise disclosure document, read it over and understand it before agreeing to everything listed in the document. Do some research about the franchise before you sign the agreements. In doing research, you might find something big that you don’t particularly like about the business. If you talk to professionals in the banking industry, a current professional who owns a franchise, and your local Better Business Bureau you can find out more about the franchisor. They often know about business plans, financial statements, and other important contracts that might be helpful to know a little more about. Once you have picked a franchise and know everything you need to know, all you typically have to do is submit an application and wait to be selected.
How to Own a Franchise
Now that you have been accepted by your franchisor what do you need to know now? The franchisor themselves will most likely go through some information with you, but you need to mentally prepare yourself, your partners, and your employees. Owning a franchise might seem like a piece of cake, but there is a lot more behind the scenes that you don’t always think of.
There are so many different companies out there looking for more franchisees each year. Donut companies like Jack’s Donuts, cleaning franchises like Jani-King, and education franchises such as Kumon all offer something that people desire. When looking for a franchise consider not only what interests you, but also consumers.
Gas and car services are products that are always in demand. Companies like BP and 7 Eleven, and Goodyear Tire are great franchises to get yourself into if you are looking for a franchise relating to cars.
Redbox is a popular source nowadays to rent movies and video games. With locations across the United States, Redbox has been proven to be a very promising franchise. Even corporately owned companies and stores like GameStop can provide ideas for you and your franchising dreams.
Cities and towns across the US are in need of gyms and fitness centers and companies like Planet Fitness and Gold’s Gym are stepping up their games for ultimate brand recognition.
If you ask a kid what their favorite food is, pizza is probably in the list of top 5 answers that you will receive. Many families today are trying to stay away from fast food chains, which means quick pizza takeout is a more preferred option for something fast and healthier than processed fast food. Pizza chains like Little Caesars, Dominos, Pizza Hut and Papa John’s are dominating the pizza industry in the United States.
With many different burger franchises out there, the desire to get into the hamburger industry remains extremely competitive. Franchises such as Burger King, White Castle, Five Guys, Jack In The Box, Whataburger, and Sonic are all competing for consumer’s across the country and worldwide. Don’t let these big successful companies scare you away. Whether it’s a Burger King or smaller franchise, there are always tons of investment opportunities within the burger industry.
How much is a McDonalds franchise?
McDonald’s, the mother of all fast food, is a safe way to go because of their worldwide popularity and well known brand. You can not go wrong in wanting to open up another McDonald’s, but in order to start a McDonald franchise, you must have $1 million – $2.2 million as a total investment.
When asking how to run a franchise, McDonald’s is probably one of the easiest once it is up and running. Whether in the UK, Australia or the United States, there are McDonald’s everywhere so another McDonald’s could be great if you have the resources to start it.
How much does a McDonalds franchise cost compared to other franchises?
McDonald’s is pretty expensive when it comes to the initial investment and total cost when you compare it to companies like Chick-fil-A and Subway.
Other Food Franchises
Dairy Queen, KFC, Dunkin Donuts, Whole Foods, Popeyes, Waffle House, Chipotle and Krispy Kreme are all some nationally recognized companies that open several franchises a year.
How much is a Starbucks franchise?
Starbucks, to say the least is one of the most loved coffee companies in the United States, if not the world. Wouldn’t it be great to be a part of this worldwide business? If you would like to take part in Starbucks, you must know that it is not actually a franchise. Similar to a franchise, Starbucks allows you to open up a Starbucks through programs in a variety of markets. If you are are a store associated with a university, healthcare campus, restaurant, or successful retail location you could always inquire about how these programs work.
Tim Hortons or Dutch Bros. provide coffee and franchising opportunities that are hard to pass up. So if you do not fit into the Starbuck’s program, you could always look for another coffee franchise.
How much is a Chick Fil A franchise?
Well known for their chicken, Chick-fil-A is a fast food chain in the US that you have probably heard of. Not only are sales thriving, but it is one of the most inexpensive franchises to start. Unlike fast food companies like Taco Bell and McDonalds, Chick-fil-A pays for all startup related costs like the equipment, property and construction needed to build the franchise.
So how much does a Chick Fil A Franchise Cost?
An estimated total investment of $300K – $800K is how much your Chick-fil-A franchise could cost you. This includes payroll, rent, cost of operation, and other startup expenses.
How much is a Subway franchise and how do I get started?
Subway is one of America’s sandwich chains that offers the most loved $5 footlong. To open up your own Subway, one of the main concerns is probably “how much does a Subway franchise cost?
How much does a Subway franchise cost?
According to Subway, the estimated cost to open up your own franchise is anywhere from $116K to $263K. Depending on location, Canada or US, prices of franchising can differ.
How to get started?
Learn more on Subway’s website, contact with any questions, and complete an application.
How to Franchise a Business
If you are looking to sell franchises of your business, it is crucial that you know the other side of things and how to buy a franchise as well. This guide can help not only those looking to you learn how to franchise your business and company in a way that makes it more desirable for possible franchisees.
1. Make sure your business is ready to be franchised
A good franchisor offers a product or service that is appealing to consumers and possible franchisees. A business with a desirable concept is most likely going to be more successful. If your business isn’t making any profit, it might not be the best to start franchising it quite yet.
2. Learn Legal Requirements
Before being able to sell your business you must file a disclosure document with the Federal Trade Commission and check in with your state about other legal issues.
3. Finalize Your Business Model
There are many things that you have to put together for prospective franchisees. Figuring out training programs, royalty and franchising fees, location availability and other franchising components can take up a lot of time, but it is a must.
4. Create Documents, Register and Hire
Making and submitting your legal documents will be the first step in the process, legally, in starting your journey as a franchisor. Once you submit everything to the FTC, you must wait to get approved. After an approval, hire staff to help possible franchise owners.
5. Sell and Sustain
Once you become legally able to sell franchises, finding people who are willing to open up a franchise will be your next hurdle. If you push your business and really sell business professionals on your concept, you will have no trouble growing your franchise operation. After you jump many hurdles to actually get franchisees, it is crucial to continually support your franchised businesses by advertising, marketing and business management.
This guide can help not only those looking to buy a franchise, but also those who want to learn how to franchise a business. Knowing what franchisees go through to get a franchise, essentially helps you to become a franchisor. Knowing this process will aid you to build your company in a way that makes it more desirable for possible franchisees.