Franchise Frenzy! How to Buy a Franchise in 5 Simple Steps
If you're thinking of buying a franchise, there are some things you'll need to know about the process. Read through to learn more!
Buy a franchise
Is owning a franchise one of your dreams? Let us help you make that dream happen by showing you how to buy a franchise in just a few simple steps!
What is a Franchise?
Someone who buys a franchise takes over a store of an already established company such as McDonald's or Edible Arrangements. You aren’t having to start your business from scratch.
You must pay the franchisor a fee upfront, and then pay continuing royalties on your business. They provide you with a trademark, support, and rights to their equipment and products.
Step 1: Consider Your Options
Look for a list of franchise chains to determine which one is best for you. Here are a couple of franchise corporations:
Soccer Shots
Checkers Restaurant
Culvers Restaurant
Edible Arrangements
Planet Fitness
Firehouse Subs
If you are interested in looking at a list of the top 2020 franchise locations, click here.
Step 2: Keep in Mind Qualifications
When buying a franchise, several qualifications must be met. I have made you a list below:
Have a credit score of at least 680 (check your score here for free.)
Capital—you will need to place a large fee initially along with other necessary franchise costs.
Net Worth—You will need your net worth to be higher than your investment.
Industry Experience—Choose a business you are familiar with. Relevant experience is one thing franchisors look at.
Experience as a Manager—You must have some type of managerial experience when running a franchise business.
Step 3: Apply for a Franchise
Fill out your chosen franchise’s applications and questionnaire forms! Once you pass the application process, the franchise will send a representative to meet with you to give you a Franchise Disclosure Document (FDD).
This document will detail the company’s fees, rules, financial history, and legal aspects. Legally, you have 14 days to review this 50-page document before you sign any binding agreements with the company.
Step 4: Determine Which Finance Option is Best for You
When it comes to funding your business, here are a couple of options you can choose from that will help you get your franchise started:
Funding from the franchise itself—Some companies offer full or partial financing options.
Step 5: Buy a Franchise Location
You can choose to lease (rent) a property or purchase outright for your business. Most new franchisees opt to lease a property since it is less money up-front. As their business grows, they may choose to buy a location.
When choosing your location whether you lease or buy, you need to consider the following:
Is your location safe and easily accessible?
Are there any major competitors to your business nearby?
Is your building space large enough?
Is your location in a highly trafficked area?
Does the location add to your advertisement visibility or subtract?
Final Thoughts
Now that we have discussed some of the ways to make your dream a reality, we must warn you, following your dream is never going to be easy.
Opening a franchise will take a lot of time, effort, and hard work but once you accomplish the goals you set forth, you will find the rewards are worth every ounce you’ve invested.
Want to learn more about how to buy a franchise? Contact us today to learn more about how we can help.
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