Franchising is a method of owning your own business under an established brand name with a tested, marketable system of rules and procedures laid down by the "Franchisor."
The base of all Franchises is the UFOC (Uniform Franchise Offering Circular) encompassing information regarding the company executives, financial condition, customer base, equipment and/or supplies, products, services, training, marketing, daily operational guidelines and on-going advisory consultants. A Franchise agreement usually runs ten (10) year or longer and relieves you of the costly time and research in opening a "start-up" business. The Franchisor has done this work for you, including location, exterior/interior building design and creating an efficiently productive consumer-friendly operation.
In choosing a Franchise, it is important to explore the types of businesses with which you are familiar. Personal knowledge of that specific business will increase your skills in the management and growth of a long term, profitable endeavor. When you find a potential Franchisor discuss your "Business Plan" with them to clarify the requirements needed in reaching success for all parties concerned. Having a comfort level regarding a particular business will allow you to proceed with the following initial steps for securing the Franchise:
- request a copy of the UFOC;
- have a Franchise Attorney review the UFOC and Franchise contract;
- sign a Franchise contract which includes the monthly royalty and advertising costs based on sales;
- pay a one-time Franchise Fee.
These steps are your commitment to uphold the rules and regulations of the "Franchisor" while assuring you of their company's total business support and assistance in helping secure your success.
In addition as part of your due diligence
- call or visit at least 3 other franchises you choose who has at least 2 years of operating experience. Speak with the owner to establish viability, ease of operations, profitability, advertising support, challenges, etc.
- clarify how much control the franchisor exerts on aspects other than graphics (local marketing, advertising, work procedures, training, etc,)
- clarify what marketing support the franchisor will give you in return for your monthly royalty.
- establish the circumstances under which you can resell, or bring another owner or partner into the business
To help determine if a Franchise will be applicable for your entrepreneurial plans, SCORE, A Resource Partner of the U.S. Small Business Administration, offers free, confidential one-on-one business counseling with experienced executives plus a day-long monthly Workshop for a nominal fee. For the location, phone number and counseling hours of the office nearest you, call our main Dallas SCORE Office at (214) 987-9491.