Once you have chosen the franchise you want to open, you have to know every detail about their franchising terms and conditions. Initial research usually begins online – you can visit the franchise’s website and find out more information about them. You may also want to view other sources aside from their website, such as reviews and testimonials from their previous and existing franchisees.
Once you choose a franchise, the franchisor will invite you to Discovery Day, a day-long event where you can meet personally. This is your chance to know more about the franchise’s corporate culture, values, policies, and the people you will be dealing with. Likewise, the franchisor will also have the opportunity to get to know you better and size you up as a potential business partner, so you have to be prepared for discovery day.
This is usually the day when the franchisor decides whether they want to work with you or not. What exactly a franchisor looks for varies from business to business. Besides specific qualifications (like a college degree, business experience, trade certifications, and enough capital to invest), a franchisor will want to know that you’re committed, enthusiastic about their products and services, and willing to follow their policies.
A typical agenda for a discovery day involves group presentations, one-on-one meetings, and visits to existing franchises. Make sure to make the most out of discovery day and get your remaining questions answered. After discovery day, franchisors will usually expect you to make a decision fairly quickly.
Considering all goes well with discovery day, the franchisor will then present you with the franchise agreement. This is the formal contract that gives you the legal rights to open a franchise, conditional on a long list of rules and regulations. It’s usually wise to consult a lawyer with franchise experience to help with your franchise agreement.
Note the promises made by the franchisor during your meetings and see if they are outlined in the contract. For instance, if the franchisor promised to provide legal support in the event of a lawsuit, ensure that this is clearly outlined in the contract. The same goes for rules on suppliers, pricing, transfer of ownership, protection of territory, royalty fees, hiring of staff, training, and so on.
Talk to the franchisor and thoroughly discuss the contract and your expectations with them. If there are any discrepancies between the verbal promises and written contract, bring them up with the franchisor. They will most likely tell you that the verbal promise was made in error and those included in the contract are the actual terms. Negotiate the terms when necessary.
With your funding in place, you can now sign your franchise agreement and start planning to operate your franchise business. At this point, the next step is to choose a location. The franchisor will usually provide some guidelines and recommendation to help you find an ideal location based on their business analysis.
Franchisors may have some strict requirements when it comes to a commercial real estate site, which includes the minimum square footage and a certain number of parking slots required. Further, most franchisors have some territory requirements.
For instance, the location of a restaurant or storefront may have to be within a certain distance of other franchises. Typically, the larger the franchise the smaller the protected territory. You might also want to choose a location based on traffic, which can increase your sales. Read our guide on how to determine foot traffic and use data to choose the right franchise location.
With everything in place, the final step is to open a franchise is get your franchise prepared for business. Other remaining tasks may include remodeling of interior, leasing or purchasing equipment, filling inventory, advertising your open jobs, hiring staff, and getting your employees trained. Read our guide on how to find employees online for more information on how to hire the right staff.
Hiring good employees is one of the most challenging parts of starting a business. The good news is, there are many different ways to find quality employees, both online and offline. Also, various online hiring platforms have been made available for those who need to hire both low-skilled and professional workers.
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