If you have been interested in changing your career to something but are not sure what, it is likely that franchising has come up as an option at least once or twice—but what exactly is franchising, anyway?
What Franchising Is
In a nutshell, franchising is a series of businesses under the same brand. You have a franchisor, who is the main business entity, and franchisees, who run different locations utilizing the franchise’s brand and resources. Franchises have a much lower barrier to entry compared to starting a business from scratch because the franchisee is able to use a brand name that is likely familiar, has access to training and proven operational methods and can generally secure funding much more easily as well.
An Overview of Joining the Franchise Business Model
Joining the Franchise System
Every franchise will have a different specific structure, but in general, franchisees will pay a flat franchising fee to join the business, and then an ongoing royalty and marketing fee to the franchisor. These fees pay the cost of branding and licensing, as well as the ongoing support, marketing materials and professional development opportunities that the franchisor provides.
Reviewing the Financial Details
As part of the franchising negotiations, the franchisor will provide the potential franchisee with a Franchise Disclosure Document to review before the sale is finalized. This will provide franchisees with earnings claims and details to weigh the opportunity that joining the franchise presents. It is smart to review this document with an attorney well-versed in franchise contracts to help you pinpoint any questions.
Participate in a Discovery Day and Sign Your Contract
As part of the process, you will attend a Franchise Discovery Day (either virtually or in-person), to meet the executives of the company, see their headquarters and get a better ideal regarding the company’s culture and values. Think of Discovery Day as a two-way interview—both you and the franchisor are evaluating whether the company would be a good fit for you. Then, provided everything goes well and you would both like to move forward, you can sign your contract and begin doing the exciting work of preparing for a grand opening!
If you’re interested in learning more about the franchising system, we would love to chat with you! Contact us today to learn more about being a franchisee with us.