With hundreds of franchises to choose from, narrowing your options, then choosing the best one, will be easier if you follow our eight-step process.
The following excerpt is from Rick Grossman’s book Franchise Bible. Buy it now from Amazon | Barnes & Noble | iTunes | IndieBound
In order to find the franchise that will be a good fit for you, you should pursue a more established course of action often called the discovery process. Outlined below is the eight-step process used to find the franchise opportunities that best fit your skill set, experience, and goals.
1. Define your goals.What are the reasons that caused you to consider franchise ownership in the first place? They can include the desire to be your own boss, the desire to better balance work and family, the interest in using your own skills to build your net worth and other similar factors. Be brutally honest. This is the time to look deep into yourself to locate your true desires. Setting goals is an important starting point for your business.
Many people set goals only to fall short and give up. This reinforces negative feelings instead of resulting in positive achievement. You can apply the following three goal rules to increase your success:
The first place most people search for franchise opportunities is online. This method can be somewhat frustrating due to the vast number of options available. It’s also challenging to discern between different types of franchises.
Narrow the field by evaluating what type of business and investment range are compatible with your lifestyle before you begin your internet search. At this point, you may also choose to work with a qualified franchise broker to help you narrow the field and assist you through the discovery process. Most brokers work on commission paid by the franchisor. Make sure that the broker has a good track record and experience in the franchise industry. They may be able to help you with financing, site selection and other elements of your business launch. If you use a broker, they should help and advise you through the balance of the discovery process.
3. Make initial contact.See how the franchisor handles your inquiries. If you get sent to voicemail, note how long it takes for them to return your call. Don’t hesitate to ask to talk to different members of their organizations to get a feel for their company cultures. Keep track of how the initial communication with the franchisors play out:
5. Evaluate the franchise documents.Once you’re received the franchise disclosure document (FDD) and the franchise agreement from the franchisor, it’s a good idea to have a qualified franchise attorney review the franchise disclosure documents with you. A standard business attorney may have little or no experience in franchising and could end up costing you more money and time since they’ll need to learn the industry.
6. Interview existing franchise owners.The franchise owner list must be included in the FDD. If it’s missing, it’s an incomplete document. Contact the franchise owners to see how they’re doing. Ask questions about the pros and cons they’ve discovered about owning this franchise.
7. Attend discovery day.Most franchisors hold regular discovery or decision day events. This gives you a chance to visit their headquarters and meet their team. These events are opportunities for both the franchisor and you to really size up the potential business relationship. Make no mistake: They’re looking closely at your personality, your manner of dress and all of the other social cues that exist whenever you first meet someone. You, of course, should do the same. As they must feel comfortable with you, you must be comfortable with them. Remember that you may be in business with them for five or even 20 years, depending on the franchise opportunity. This is a decision that must sit comfortably with you on an emotional level as well as a business and financial level.
8. Execute the franchise agreement.The very last step is to execute the franchise agreement and related documents attached to it. Be sure to file your copy of the executed documents for future reference.
Franchising is a fantastic way for first time business owners to start their journey! As people want a departure from traditional 9-5 work settings for more flexible work options, a franchise can often afford that exact flexibility with the added benefit of a proven concept behind a new business venture. This offers less risk and more reward for those green to starting a business! Before starting any business, it's vital to do your homework to investigate if it is the right opportunity for you and your lifestyle. I've found that the word "franchise" can be a deterrent but there are also many myths tied to franchising!
1. Franchising is too expensive. While there are franchises that are very expensive to open, just like any business model, there are less expensive options as well. Depending on the type of business, many franchises have a franchise fee under $50k and overall start up capital of less than $100k. And while many consider a franchise fee yet another expense, working with an existing brand concept can save you tens of thousands in product and service testing and market research. I think of a franchise fee as "buying your mistakes away". Most business owners will likely spend the same amount as a franchise fee on their own concept in the first 10 years of doing business when instead they could be focusing their time and money on growing an already proven concept.
2. I can’t manage a business that I don’t have experience in. You absolutely can! The beauty of franchising is that it offers opportunities in every industry and comes with a plan designed for success! This is a great opportunity to pursue a career in a field of your choosing where you will receive training, ongoing support, marketing materials, products, and a business plan from a tried-and-true corporate partner.
3. Success is guaranteed. While brand recognition, location, and a developed business system can take you far, the benefits of franchising do not automatically guarantee you success. Franchisors promise to offer the tools to succeed, not guaranteed success, and if they do, that is something to be very leery of. Owning a franchise is hard work and the only person responsible for the success of your business is you.
4. Choose a franchise with name recognition. Branding can work for or against you – if the national brand has success, you will draw in more people but if the brand is flailing or has experienced a public relations fiasco, your business will feel the pain. As novice entrepreneurs, it is easy to believe that a strong brand will equate to a successful business but people are not as brand loyal as we may think they are. The brand should not be at the top of your list when searching for a franchise – things like ROI, success rates, structure, product quality, and initial investment should be.
5. Franchisors only care about the fees and not about my success. Franchisors want their franchisees to be successful! Without successful franchisees, there would be no franchise and they would not be able to collect royalties. Unsuccessful franchises damage the brand and deter potential franchisees from seeking opportunities. It is in the best interest of the franchisor to help their franchisees run a successful business.
To find out more about franchising with Bella Ballerina, visit the franchise information page on our site HERE and find out if your territory is available!