According to the U.S. Bureau of Labor Statistics, 20% of small businesses fail in the first year and roughly half fail within 5 years of launch. The bottom line is that starting a business is hard.
There is one tried and true way to give your small business startup the best possible chance at survival. Get help by starting a franchise.
Why might a franchise be the answer?
This guide will help you better understand what a franchise is, why it could help you succeed, and how to start a franchise of your very own.
Why Franchise?
The franchise business model works because you are buying into a proven business model. Instead of inventing a brand new model and handbook for the workings of a new business on your own, buying into a franchise allows you to capitalize on someone else’s legwork.
Many franchisors also offer their franchisees coaching on how to run a franchise for a year or more. The bottom line is that when you start a franchise, you have a team of people invested in your success that have been there before.
Choosing a Franchise
When you look for a franchise to buy into, there are a lot of factors to consider. You’ll have to think about things like where you’ll want your business and what the competition is like in the area.
You’ll need to think about whether your market’s demographic can sustain the type of business you want to open. Most importantly, you’ll need to consider the startup costs associated with each franchise option.
You’ll have to find the magic combination of all of these elements to give yourself the best chance at early and sustained success. It also helps if you choose a business that you believe in. Franchise management, like any business, is easier when you love what you do.
Once you’ve done the research and found a good fit for your location, your budget, and your market there are some prescribed steps you’ll have to take to get your franchise up and running.
1. Franchise Disclosure Document
This is the legal document that tells you everything you need to know about your potential partner. After requesting and receiving the franchise disclosure document, you’ll have a legally mandated wait-period during which your franchisor may not contact you.
2. Meet and Greet
Most franchisors will have you out to their base of operations to meet the team you may end up working with. This gives both parties a chance to ask questions, get to know one another, and evaluate the fit.
3. Franchise Agreement
If everything feels right at this point, you will be given the franchise agreement. Take time to go over this contract with an attorney to make sure you are aware of every aspect of the legal relationship.
4. Training
Depending on your franchisor, you’ll now attend a training course that could last anywhere from one to several weeks. This training will cover how to open a franchise under their brand.
5. Launch
Congratulations, you are ready to launch. Depending on your situation, you may still need to work on real estate or brick-and-mortar store build-out. You should expect a lot of help from your franchisor as you get your business up and running.
How to Start a Franchise
Ultimately, if you want to know how to start a franchise, the answer is pretty simple and formulaic. That’s part of the reason it works. Though, depending on the industry and type of business you choose, there may be additional steps and time before your initial launch.
But if you want to know how to run a franchise, it’s a different story. This is still a business, your business. And though you will have a team of people supporting you, the success or failure of your business will always rely on your willingness and ability to do the hard work of being a business owner.
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