FAQ's for Starting a Franchise
FAQ's for Starting a Franchise
How much capital do I need?
While the franchisor will give you guidelines, many candidates get hung up on an absolute number that is provided by the franchisor. Just remember this: it usually takes more capital than you would expect to start any business. While a franchisor has the knowledge of many others who have gone before you, please do not underestimate the number.
Do I need to have a good credit score?
Probably yes. Even though you may be able to convince the franchisor that you have sufficient capital, experience, and knowledge to start the business, there will be other related business dealings that will require a good credit standing. Think about trying to open a bank account, trying to borrow money, signing a property lease, etc.
Do I need experience in running my own business?
It varies. Many very basic opportunities require no prior experience whatsoever. In fact, that can become a major advertising pitch for many. Others may require a great deal of experience and business savvy.
Do I need knowledge of my desired industry?
Reference above, once again, this really can vary.
Do I need to use a Franchise Broker?
Absolutely not, franchise brokers can add value however. They can help screen potential franchise candidates. They can also coach you on the proper do’s and don’ts during the application and approval process. Just keep in mind that franchise brokers may only represent a select few franchisors. Online web portals, such as The Business Market, can provide an easy way to search for existing franchise opportunities. They will likely have a very large number of listings relative to what a broker will represent.
Can I operate my business from my home?
Sometimes yes. However most franchise opportunities require a business location. Many are retail related.
How long does it take to open?
Expect the entire process to take anywhere from 60 to 180 days.
What type of training and support do you provide?
Everyone brags about their unsurpassed training and support. The truth is, most do an excellent job of providing proper training. And if you think about it, it is in the franchisor’s best interest to provide ongoing support. If you prosper, then they will prosper through the collection of royalty payments from you. After all, they have their reputation and name on the line.
What is a “Discovery Day?”
A Discovery Day is a day devoted to you at the franchisor’s headquarters. You will spend time with key managers and trainers, learning about systems and how the franchisor will help you succeed in your business.
Will I have a protected territory?
Almost definitely, that is one of the big selling points for any franchisor.
Will I have to pay ongoing royalty fees?
Absolutely, this is the primary reason that any franchisor would want to franchise their opportunity in the first place.
Note that many low cost opportunities are not really franchises, but they are considered Business Opportunities (BizOps). BizOps are very unregulated and usually have a very small entry cost. There are no ongoing royalty fees with a BizOp. Many are home based. However, be careful when choosing a BizOp. Make sure that the opportunity is tried and proven.
There are exceptions of course. Many larger companies offer BizOps. One example is Sign Biz, Inc. They have been around since 1989 and have over 170 existing locations.
FAQs for Starting a Franchise - To learn more about this author, visit Tom Parsley's Website.
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Here are 11 commonly asked questions that are asked by potential franchise candidates. Note that there are no standard answers for any question. Answers can vary dramatically from one franchisor to another. Please use this as a basic guide.
How much capital do I need?
While the franchisor will give you guidelines, many candidates get hung up on an absolute number that is provided by the franchisor. Just remember this: it usually takes more capital than you would expect to start any business. While a franchisor has the knowledge of many others who have gone before you, please do not underestimate the number.
Do I need to have a good credit score?
Probably yes. Even though you may be able to convince the franchisor that you have sufficient capital, experience, and knowledge to start the business, there will be other related business dealings that will require a good credit standing. Think about trying to open a bank account, trying to borrow money, signing a property lease, etc.
Do I need experience in running my own business?
It varies. Many very basic opportunities require no prior experience whatsoever. In fact, that can become a major advertising pitch for many. Others may require a great deal of experience and business savvy.
Do I need knowledge of my desired industry?
Reference above, once again, this really can vary.
Do I need to use a Franchise Broker?
Absolutely not, franchise brokers can add value however. They can help screen potential franchise candidates. They can also coach you on the proper do’s and don’ts during the application and approval process. Just keep in mind that franchise brokers may only represent a select few franchisors. Online web portals, such as The Business Market, can provide an easy way to search for existing franchise opportunities. They will likely have a very large number of listings relative to what a broker will represent.
Can I operate my business from my home?
Sometimes yes. However most franchise opportunities require a business location. Many are retail related.
How long does it take to open?
Expect the entire process to take anywhere from 60 to 180 days.
What type of training and support do you provide?
Everyone brags about their unsurpassed training and support. The truth is, most do an excellent job of providing proper training. And if you think about it, it is in the franchisor’s best interest to provide ongoing support. If you prosper, then they will prosper through the collection of royalty payments from you. After all, they have their reputation and name on the line.
What is a “Discovery Day?”
A Discovery Day is a day devoted to you at the franchisor’s headquarters. You will spend time with key managers and trainers, learning about systems and how the franchisor will help you succeed in your business.
Will I have a protected territory?
Almost definitely, that is one of the big selling points for any franchisor.
Will I have to pay ongoing royalty fees?
Absolutely, this is the primary reason that any franchisor would want to franchise their opportunity in the first place.
Note that many low cost opportunities are not really franchises, but they are considered Business Opportunities (BizOps). BizOps are very unregulated and usually have a very small entry cost. There are no ongoing royalty fees with a BizOp. Many are home based. However, be careful when choosing a BizOp. Make sure that the opportunity is tried and proven.
There are exceptions of course. Many larger companies offer BizOps. One example is Sign Biz, Inc. They have been around since 1989 and have over 170 existing locations.
FAQs for Starting a Franchise - To learn more about this author, visit Tom Parsley's Website.
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John PowerJohn Power, founder of Biltmore Franchise Consulting, has extensive experience developing and marketing franchises and business opportunities. He has been in and around franchising for over twenty years. From 1980 through 1990 he conceptualized, organized, and developed the American Video Association. He grew AVA to 2,000 national members, before selling the company it 1990. It was later merged into another home video marketing company. From 2000 to 2005 he worked as a contract marketing and human resources consultant to several local and national companies. In 2005 Mr. Power began working as a franchise development consultant on a full-time basis. Since that time he has helped more than three dozen companies initiate and develop their franchising program. He notes that there are many companies interested in developing a franchise program, and who need his specialized assistance. Mr. Power is a “hands-on” franchise consultant. He said, “I am the ‘nuts and bolts’ person who tends to the details for my clients.” Mr. Power holds a B.S. degree with a major in Marketing. See: www.biltmorefranchise.com You may contact Mr. Power at: jpower@biltmorefranchise.co - Visit John Power's Website |
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Anne BarrAnne Barr has over 26 years experience in sales and marketing, six years as a franchisee. She has assisted over 367 business owners and purchasers to achieve their goals in career change, transition and exit strategy. She holds the designation of Certified Franchise Executive from the International Franchise Association, Certified Business Intermediary from the International Business Brokers Association and Board Certified Broker from the Texas Association of Business Brokers. Anne is active in professional organizations, networking groups and volunteers for non-profit entities. As owner/operator of four successful businesses, Anne has proven people skills and enjoys helping clients find the right "fit" in business ownership. Visit www.FranchiseOpportunitySpecialist.com for more information about me and my company. - Visit Anne Barr's Website |
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John BrennanJohn Brennan Ed.D. Dr. Brennan is President of Interpersonal Development, LLC, a training and development firm. Interpersonal Development has provided sales training and coaching to more than 3,000 sales reps from over 100 companies. A native of Australia, Dr. Brennan received his doctorate from the University of Rochester. His dissertation researched the effectiveness of Behavioral Modeling Technology in training people in interpersonal skills. While he has spent most of his career designing or delivering training, he was also a Vice-President of Sales of a training and development franchise with operations in 25 markets. Dr. Brennan has designed and delivered sales training in North America, Asia, Europe, Australia and the Middle East. He has been a guest speaker at numerous national and regional professional conferences. When Microsoft wanted Best Practices articles on sales for their web site, they called Dr. Brennan. The results are at http://office.microsoft.com/en-us/FX011387391033.aspx His firm’s clients have included Volvo, The Prudential, Merrill Lynch, Eastman Kodak, Gannett, Equifax Europe, the Economist Group and countless small businesses. - Visit John Brennan's Website |
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Jay Kubassek(Jay's Full Bio: EvanCarmichael.com/jaykubassek) In five years, Canadian-born entrepreneur Jay Kubassek went from selling mufflers at a Midas franchise to revolutionizing Internet marketing with the 2004 launch of CarbonCopyPRO, a online marketing education company, now worth over $20 million with customers in over 160 countries.
As an independent film producer, his upstart film fund Aliquot Films is currently producing a films with Spike Lee and Abel Fererra (starring Ethan Hawke and Dennis Hopper.)
Jay's entrepreneurial spirit is irrepressible. He’s the owner of five companies, a professional speaker and trainer, international real estate developer/investor, extreme sport enthusiast and emerging philanthropist. Jay resides in NYC with his wife Jamie, son Milo and dog Cooper. Visit Jay's official website: www.JayKubassek.com - Visit Jay Kubassek's Website |
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