Franchising how to get started

Franchising how to get started by Michael Cheary Interested in franchising, but dont know where to start?If you think owning your own franchise business might be the right career move for you, it can be difficult to know exactly what you need to do to get the ball rolling.To help you get started, heres a quick step-by-step guide of what you need to know:Step one: Choose the right type of franchise for youFirst things first: its time to choose which type of franchise business best suits you.There are a wide range of options available, including:Investment franchisesExecutive franchisesRetail franchiseDistribution franchiseDepot franchiseJob franchiseLifestyle franchiseManagement franchiseDeciding the type of franchise which youd be most passionate about will go a long way to determining your success.Step two: Research franchise opportunitiesAfter youve found a franchise you think fits, its time to back it up.The aim of researching a franchise opportunity is to understand as much as you can about the market, and minimise the risk involved. If done properly, your research should be able to provide you with a tried-and-tested formula that you know is likely to succeed in your chosen area.Your research may include:Studying the sector youre looking to move intoIdentifying the market for your product or serviceIdentifying the need for that type of business in your chosen locationFocusing on three or four franchises as case-studiesSpeaking to as many franchisees as you can to hear about their experiences first handIf you think youve suitably prepared a good business case around starting your franchise, the most important thing left to consider is whether it is a financially viable option for you.Step three: Think about financeThe investment needed from you will vary depending on the type of franchise opportunity you choose. For this reason, its always important to gain a comprehensive understanding of all of the costs involved.Firstly, it may be difficult to draw a wage at first. Consider ho w much money you will need for personal commitments and living expenses to make sure youre not overstretched.In terms of outgoings, starting/ongoing costs could include:The initial purchase price of the franchiseAmounts for professional feesWorking capital to run the businessA management service fee or royaltyA contribution to advertising costsA small percentage of salesAdmin feesIn terms of the amount you need to get started, all franchise businesses work different, but as a general rule you should have somewhere in the region of 30% of the total funds available (as finance can often be arranged for the rest*).If youre struggling with costs, there are many banks with specialist franchising finance divisions to help support you. They can provide budgeting tools and a range of other expertise which could be an invaluable resource to anyone seriously thinking about franchising.Step four: Make your moveAfter sorting out the financial aspects of franchising, its time to choose your oppo rtunity and make a move. Contrary to popular belief, just because you have the capital to purchase the franchise, it doesnt mean that you will automatically be accepted.Franchisors have invested time and energy into building a successful franchise model, and part of this can be put down to working with the right people. Driven and self-motivated individuals will be top of their shortlist, so always ensure youre able to demonstrate these qualities enthusiastically during your application process.Step five: Set yourself upOnce your application has been accepted and the relevant checks have been made, the next step is to make everything official and sign the contracts.As a franchisee youll be leasing a business system from its owner, the franchisor. This will usually involve signing a comprehensive legal agreement setting out the terms of the business partnership, and paying a licence fee to the franchisor for the right to set up in business for a specified term.As soon as everything i s signed sealed and delivered, you officially own your own business.* Dependent on your personal circumstances, background and financial history.Find out about the latest franchise opportunities