How to Open a Franchise
We get this question all of the time… “How do I open a franchise?” and this 10 point guide is here to help answer that question for you. You may want to also check out what franchise you should consider opening:
An OpenDoor Franchises Agent would be more than happy to tell you about the handful of companies that fit you, your family and your investment goals.
OK so you’ve found the right couple franchises for you - congrats! Now what? Here are the 10 steps to open a franchise:
Do a territory check - Your agent reaches out to the company to do a “territory check”. This territory check is to find out if your market is available with that specific business. There are a few responses that could come back: 1. Yes it is let’s chat!; 2. No, I’m sorry that’s unavailable; or 3. No, but one just down the street/next town over/neighboring zip code is available. #3 can happen when your EXACT location isn’t available but something nearby is. That’s a conversation between you and your agent to see if that’s a reasonable distance for you to travel and own.
Initial phone call - Alright so the business you like best has a territory available to you. Now it’s time to connect with that company and see if you like each other. TIME FOR SOME CORPORATE DATING! They’ll get some preliminary information about you before the call that your agent collected for them so they are prepared for a meaningful conversation. Your agent will be on that call to support and you’ll come to the call with questions, comments, concerns and so will they. You’ll get to know each other a little bit and see if a second, more in-depth call, is in order. If so, your Agent will set that up for you as well.
Get some paperwork and review together - In the second call, you’ll start digging into the numbers and, potentially, review the FDD (Financial Disclosures Document) where they really start getting into the investment and the plan for making you money. This can trigger a series of conversations to make sure you understand everything you’re seeing and reading.
Validation calls - If all goes well here you’ll typically be invited to do “validation calls” where you can call current franchise owners in their locations and ask them some questions. Questions like, “Sooooo how’s it going?” and “If you had it to do over again would you purchase this franchise?” Your OpenDoor Franchises Agent can help supply you with plenty of questions to ask to find out what their experience and earning potential has been.
Attend Discovery Day - A lot of franchises will invite you out to meet with them and really get to know you while you get to know them. You’ll get to see their operation to get a good feel for if this is a company you want to represent and be an owner of. They’ll be evaluating you as much as you are evaluating them! This is typically where a company decides if they want to move forward with you and you decide if you want to move forward with them.
Review and sign documents - This is where the legal stuff comes into play. You’ll want to review all the documentation (we recommend looping in your business attorney at this point if you haven’t already), and the terms of the agreement will be laid out. These documents spell out what you’re buying and for how much including royalties, ad spend, fees, etc. It’s the contract between you and the business so read it carefully and understand what you agree to and what they agree to with supporting you.
Finalize funding - Your OpenDoor Franchises Agent will have resources for you to consult before you get to this step to make sure you know how much you are eligible to borrow and the terms of that lending. This is just the stage where you determine what funding you’re doing and move forward. You’ll know in advance of this stage what your borrowing potential is. You’ll then pay your franchise fee (typically by a wire transfer), and you’ll be making it official at this point!
Chose a physical location (if applicable) - You have probably started scouting out locations in advance but now you’re ready to plant your flag! Most franchises help you site location services and lease negotiation so don’t worry too much about this stage. They will help you with the proper evaluations and terms. Remember: the franchise REALLY wants you to be successful because you’re paying royalties — when you’re successful they earn more money! If you have build out and modifications to make you’ll begin that process right away. (None of this applies if you’re doing a work from home option).
Go through training - You’ll go through a training process with every franchise. Some trainings are in person, some done online, some over the phone — it varies with each business. It also varies on duration and scheduling. Some franchises run regular training courses or do them online, so you can do them in your time. Some only offer it once a month or once a quarter so that can change your schedule to launch. Your OpenDoor Franchises Agent will make sure you know those factors when you’re calculating your startup timeline.
LAUNCH THAT BUSINESS! - You’ve done your homework, you’ve found the right business for you, you’ve jumped through all the hoops, and now you’re funded, trained, and ready to start your own business in your town! Your franchise will help you plan your opening day activities, marketing and anything else you might need (employees, materials, signage, etc.) to make a great first impression. You turn on the sign, unlock the door and welcome the people to your new business.
The 10 steps above are your guide to know what to expect during the process after you have chosen some businesses to pursue. There are idiosyncrasies with any business and some franchises might add or omit steps or flip-flop some of the process for their own purposes but this is a pretty general plan of what happens. When you work with an OpenDoor Franchises agent they will help you find the right business for you as well as be your advocate through the entire process you see in the 10 steps above. Your agent takes out a lot of the guess work, streamlines the process and makes sure you understand what’s happening, why its happening and how to handle the process expertly. If we can help you in your search or evaluation process please let us know!