How to Become a Franchise Owner

The franchising model allows entrepreneurs to hit the ground running with a proven business model and invaluable support. By investing in a known brand, franchise owners can leverage brand recognition to maximize their ROI rather than starting a business from scratch and taking a major risk.

But what does it take to become a franchise owner?

Do Your Homework

First, consider the pros and cons of owning a franchise compared to starting your own business or working a traditional nine-to-five. Though there are massive benefits to owning a franchise, there are still risks involved with making such a large investment.

Next, determine which industry best fits your ambition, personality and interests. There are franchises within every sector, so it is critical to pinpoint what type of service or product you want to offer your customers — restaurant, home services, automotive, petcare, and retail are common options. It is often worth leveraging prior experience or knowledge when choosing your business venture. Selective franchisors may be drawn to candidates with managerial or otherwise relevant experience.

Franchise search websites can then be used to filter by industry and determine the franchise that best fits your distinct profile. At this stage, consider applicant requirements, finances and day-to-day business operations when selecting potential franchises. A brand’s Franchise Disclosure Document (FDD) is the ultimate research tool for prospective franchise owners vetting potential opportunities. The document includes the history of the franchisor, costs to consider, franchisor obligations, performance indicators, and even contact information for existing franchisees.

Ultimately, you want to select a franchise that has a strong reputation, is in a growing market and has a solid financial track record.

Contact the Franchisor and Submit an Application

Contact the company through the brand’s franchising portal and get in touch with a franchising representative. This representative will guide you through the application process and can answer any questions you may have about candidate requirements, hidden fees and details about the business itself.

Though every application is different, you can expect various administrative requirements, including a background and credit check, qualifications test, and providing tax documentation.

Develop a Business Plan

Through data collected from the franchisor and your research, you should next develop a concise and engaging business plan. Include goals, projections and marketing strategies when creating your plan — it will need to be compelling, as you will need to present this plan to a lender to secure funding.

Secure Financing

Before signing a franchise agreement, you will need to secure funds for an initial investment. Unless you are wealthy from the outset, you will likely need to utilize a lender or a franchise financing program. Many large chains have established relationships with lenders that can help you get a lower rate and streamline the application process.

Once your funds are secured, you are ready to sign on the dotted line and officially become a franchise owner.