These days buying a franchise is becoming a trendy path to entrepreneurship, especially among first-time entrepreneurs, as franchises allow first-time entrepreneurs to have the experience of running their first business with support and access to a proven system. This kind of support is invaluable, especially if you are a first-time business owner, but with franchises becoming increasingly popular, it leads aspiring entrepreneurs to ask the question of ‘How to become a franchisee?’ In this guide, we will cover the multiple steps toward franchise ownership.
Research franchise opportunities
The most crucial factor to your franchise businesses success as a new franchisee is mainly down to doing your due diligence before investing in a franchise. It is essential to research each franchise thoroughly to ensure you make the right decision. This is why when contacting franchisors using a franchise directory such as ours at Franchise UK, we recommend you make a shortlist of potential franchise opportunities you are interested in. This will help you avoid wasting time, as you will have multiple options if you decide a particular franchise is not suitable for you and your career goals.
Study the franchise disclosure document
Once you find a franchise you are interested in pursuing, we recommend you study the franchise disclosure document the franchisor is required to provide to potential franchisees. This will inform you about the potential earnings of the franchise opportunity, and more this will help you get a good idea of the income you can expect as long as you put in the hard work when running your franchise business.
If you are happy with everything stated in the franchise disclosure document about the potential profitability of running the franchise, the next step would be to secure financing to pay the initial franchise fees, which will provide you with training and more, depending on which franchise you decide to invest in. Many franchisors will have agreements in place already with lenders or banks. Still, there are many other ways to secure funding to buy a franchise, such as starting a group of investors or tapping into your existing reserves.
Sign the franchise agreement
The last step to opening your franchise business doors after you have paid your initial franchise fees is to sign the franchise agreement. Remember, it is crucial to study your franchise agreement before signing. Also, it is recommended to seek professional legal advice before signing a franchise agreement if you need clarification on anything highlighted in the document.
If you want to learn more about franchise agreements, we recommend you read our previous article about how franchise agreements work.
Open your franchise
Now you have paid your initial franchise fees and signed your franchise agreement. Your franchise is now ready to open its doors to the public. There are still other fees you will be expected to pay as a franchisee, such as royalty fees which are usually a monthly percentage-based fee of your revenue. Although some franchises can charge a fixed fee, this is quite rare. If you would like to find out all the costs that can come with becoming a franchisee, feel free to read our guide covering all the costs involved in buying a franchise business.