Find Franchise Opportunities
There are a wide variety of franchise opportunities available. The first step someone would take is to narrow down the selection to an industry (such as a food, cleaning, check cashing or toys) and then eventually to three or four business choices. There are numerous websites that provide detailed information about franchise opportunities, including FindaFranchise and FranchiseOpportunities (see direct links under Resources). Simply click on the industry that you are interested in entering (preferably one that you have direct experience in), and you are presented with a long list of franchise businesses along with contact information. You can also narrow down the choices by your location, as some franchises are available only in certain regions. The franchiser will give you a list of specific locations where a franchise opportunity is available because it does not want too many franchise locations in the same area of a city or town. You can also do your own footwork in the town where the opportunity is being offered to determine how many current franchise locations there are of each business that you are interested in.
Some prospective franchisees cold-call franchising companies that they are already aware of to see if there are opportunities in their area.
Arrange Financing
The prospective franchisee must get preapproved for financing before proceeding further in the process of opening a franchise. Many franchises require multi-thousand dollar investments from the owner to cover supplies, rent and costly franchise fees. So a prospective franchise owner will ideally apply for financing at a local bank to be approved for funding in advance of contacting the franchise company with a serious inquiry, unless of course the person has his or her own money to invest in the business. The prospective owner will likely need to put up collateral, such as a house or other property, in order to secure financing.
Apply for the Franchise Opportunity
Next, the prospective franchisee will be required to submit an application to the franchise company to determine creditworthiness. The parent company will also look into the character and reputation of the applicant, because how she conducts the business will reflect on the entire company.
Close the Deal
After the application is approved and financing goes through, the franchise company will assist the franchise owner in finding a location for the new operation, completing lease paperwork, buying equipment and hiring employees. The franchise fee includes initial supplies from the parent company to begin operations. When the franchise business is up and running, the parent company leaves the owner to handle the day-to-day business affairs but is still available for support. The franchise owner is required to follow a specific set of guidelines while running the business, including how the business is advertised, how customers are treated and how the product or service is done. The franchisee must pay fees to the franchise business owner regularly to maintain the business.
