If you have an MBA or a background in business, there’s a good chance you’re aware of at least the most basic steps involved in starting a business, from putting together a business plan, to securing funding from lenders and investors, to finding a location, hiring employees, and setting up deals with suppliers, just for example. If you’re smart, you’ve also spent some time working and familiarizing yourself with the industry in which you plan to start your own company.
However, you may also be interested in the opportunities and benefits offered by franchises. As you may imagine, a lot of the legwork of starting these established businesses has already been done for you by the original proprietors. This could fast-track the process of launching your operation, as well as starting to see profits.
It probably sounds pretty great, and truly, there are many advantages to buying into a franchise as opposed to launching a startup operation. However, you’ll get the most out of buying a franchise when you understand exactly what it is you’re getting into. Here are a few of the basics you should know before you move ahead.
Paying the Piper
Buying a franchise means buying into the opportunity to participate in the brand. This upfront cost is in addition to any of the expenses associated with starting a business, such as purchasing a location, setting up contracts with suppliers, obtaining permits and insurance, hiring a staff, and so on. You have to pay to play.
There will also be ongoing expenses associated with owning and operating a franchise and you should be aware of these, as well. You may be on the hook for fees and/or a percentage of earnings. All costs vary by franchise. For example, you can expect to pay a lot more for a McDonald’s franchise (which could set you back more than $2 million) than you would for an Edible Arrangements franchise (which tops out around a quarter of a million).
However, you get what you pay for: potential. You can reasonably expect to bring in a lot more profit with a McDonald’s, which is internationally recognized and hugely popular.
Knowing Your Role
When you buy into a franchise, you’re becoming a member of an established organization. Are you the boss? Yes and no. You have the ability to manage your franchise as you see fit – to a degree. You must do so within the parameters of guidelines set forth by the brand.
This could mean using certain decor in your store, making your employees dress a certain way and use certain dialogue with customers, and following policies and procedures laid out by the franchisor. In a way, this is beneficial because you don’t have to go through the trial and error of figuring these things out on your own. On the other hand, it can be somewhat limiting to your creativity and your ability to improve things you see as problem areas.
It’s extremely important that you take the time to hire a qualified lawyer and read through the franchise contract before you commit. This will help to ensure a mutually beneficial relationship between you and the franchisor.
Towing the Company Line
Everything you do reflects on the brand you represent, and you must act in keeping with company policy. If you decide to buy a Chick-fil-A franchise, for example, you must close on Sundays, per company policy. This has to do with the founder’s devotion to a day of rest and prayer, as prescribed by his Christian faith.
Before you get in bed with a company, you need to make sure your worldview aligns with their values, their mission, and their goals, because owning a franchise means reflecting these tenets. If you don’t agree with the obligations spelled out in the contract, you might want to keep looking for other opportunities.
One of the best reasons to consider franchise opportunities in Seattle is the existing support structure. Yes, you pay to buy in and you have to play by the rules, but you get many benefits in exchange.
Franchisors have a vested interest in your success, so they generally provide you with extensive and ongoing training, as well as needed operational materials to ensure you have the foundations needed to launch a successful enterprise. Advice, assistance, and mentorship are part and parcel of the deal, as well, and you may even enjoy extras like marketing materials for brand campaigns.
What does it mean to buy into a franchise? In a sense it means joining a family and gaining not only a set of established guidelines and rules, but also a vast support network striving to help you succeed.