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Get approved for a franchise

Written by: Sebastien Page

Article Overview: So, you’ve decided to start a franchise. What now? Once you have made that big leap, it is important to figure out if you and the company are a good fit.

Get approved for a franchise

So, you’ve decided to start a franchise. What now? Once you have made that big leap, it is important to figure out if you and the company are a good fit. Like any job interviewing process, you have to find out if the company fits your needs. More importantly for the approval process, you need to meet their guidelines to be a franchise owner. Otherwise, it doesn’t matter how much you like the company – they are in the driver’s seat, and they have to decide if they think you are compatible with their philosophy.

When you approach a company to sign up for franchising with them, you may think all you need is to have enough money and the desire to work with them. However, having sufficient funds is not enough for the company. The company will want to discern if you can be successful for them. If you are serious about starting a franchise with them, you will have to deal with a lot of questions, discussions, and paperwork.

You should also think carefully about your own temperament. If you are very creative and entrepreneurial, most franchises are not going to be a good fit for you. It is important to them that you follow their system. Their system has been successful, so they expect you to be willing to work with it rather than doing your own thing. You will have to sacrifice some control if you want to be approved for a franchise. They want to maintain consistency among their locations, and if you think about businesses which are franchised, any given location will follow the guidelines set up by the franchisor. If you do not follow their guidelines closely, particularly in cases where the company has almost complete control, like many fast food restaurants, you will be in trouble.

What do franchisors want from a candidate? Several things are important, including personality, funding, and skills and experience.

Personality is something the franchisor will assess when they ask you questions and meet with you. Franchisors do want you to be somewhat entrepreneurial, but you need to be able to follow their guidelines, to ensure their formula for success. They also care about your personality in general; they want to know that you are committed and confident about working with them.

Funding is probably the most obvious and significant part of the equation. When signing up with a franchisor, you need to have your finances in order and be able to tell them what your net worth is and how much liquidity (assets you can convert into cash relatively quickly) you have. Borrowing money from a bank is more difficult than you might think, even if your credit is good. More importantly, it is considerably less appealing to a franchisor than having the cash yourself.

Finally, as with any job, your experience and skills matter. Franchisors want to see that you have management experience and the ability to market your business. They also want to make sure that you can handle the schedule that running your own business entails, which is much more work than the 9 to 5 job that most of us are accustomed to.

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Article Tags: complete control, consistency, desire, enough money, fast food restaurants, franchise owner, franchises, franchisor, job, leap, paperwork, personality, philosophy, temperament



Related Forum Posts
re: franchising mistakes - Great list Michele. I would expand on the first point re: due diligence, to call and speak with a number of existing franchisees. In my experience, I am amazed at *some* folks lack of due diligence... It's as if they are set on the concept, and have no desire to hear other opinions. While you may get a list of references from the Franchisor, it wouldn't hurt to call a few franchisees that are not on their approved list. You may be surprised at what you learn. I can think of a handful of franchise offerings (very recognizable brands) that, upon deeper research, would reveal a darker side that would send me - and any other sane entrepreneur - running in the opposite direction. Yet there are people still buying into the franchise concept with a glazed look in their eyes.
Re: Ever been scammed... - [quote="bennyboy7":3i1zq7nu][quote="David Castro":3i1zq7nu]Have you guys ever wondered why we get so many pre-approved credit cards on the mail?[/quote:3i1zq7nu] ??? Pre Approved credit cards? Hows does that work? [/quote:3i1zq7nu] They're not "pre-approved, " they just say they are. I used to work at a call center where people would call in to try to get credit cards... and the computer would tell me within a minute if they were approved or not -- it seemed like everyone who got turned down then went ballistic because they'd gotten a "pre-approved" letter in the mail, and yet they had in actuality had abysmal credit, and were given false hope.
Hello I am a franchise expert - Hello, I recruit franchise owners for successful franchise concepts based in the USA. Many of my franchises are looking to expand north to Canada in all major centers. I enjoy networking and answering questions about franchising. If anyone is interested in the franchise world or looking to buy a franchise then contact me. I have a wealth of information and like to help. Thanks for your time. Michael Somer
Re: Franchising Brokers vs Franchising Consultants - Franchise consultants are free and work with you without any obligation. they do not work for any one franchise but do get a percentage of the franchise fee when a franchisee that was registered with the franchise came from the consultant and the franchisee signs. They will try to match up your interests and skills to franchise businesses that are right for you. They can explain franchise guidelines and help you in any way they can. Franchise brokers usually get paid by the client and/ or franchise (generally get some type of commission). Additionally, they can get points or referral fee off the deal if they refer you to a lending resource too after they sell you on a franchise. Typcally they will try to sell a prospective franchisee on a larger deal so they get a larger commission.
Re: Which franchise would you buy? - The franchise to buy, the one that will succeed is the one that is either underrepresented or not represented in the community. Look at your community, identify what service is missing. That is the franchise to pursue. Too many people buy a franchise based on their "heart". A franchise is a "widget". I have found that once people began to investigate a franchise they had never thought of, but find their is a need; the entrepreneurial "gene" kicks in and they get excited. They began seeing the possibilities of success, and as they uncover the nuances of the franchise, they become more interested. It is the uninformed that are uninspired.


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