{"id":101259,"date":"2023-02-28T17:30:00","date_gmt":"2023-02-28T17:30:00","guid":{"rendered":"https:\/\/businessyield.com\/?p=101259"},"modified":"2023-03-31T10:00:25","modified_gmt":"2023-03-31T10:00:25","slug":"how-to-start-a-franchise","status":"publish","type":"post","link":"https:\/\/businessyield.com\/business-ideas\/how-to-start-a-franchise\/","title":{"rendered":"HOW TO START A FRANCHISE: Meaning, Examples and How to Get One.","gt_translate_keys":[{"key":"rendered","format":"text"}]},"content":{"rendered":"\n

The owner of a franchised business gives other people the right to run that business from their own locations, which means selling the owner’s products and providing the owner’s services. Every franchise location is independently owned and run. In exchange for using the franchise model, each location pays royalties to the franchisor, who owns the brand. Before diving into the world of franchising, it’s essential to consult with a franchise expert<\/a> who can offer valuable insights and guidance on navigating this business model. They can provide assistance in understanding the legal, financial, and operational aspects of franchising, ensuring you make well-informed decisions. This article talks about the requirements to start a franchise business with no money, its examples, and the advantages of franchising.<\/p>\n\n\n\n

Overview<\/span><\/h2>\n\n\n\n

In the United States, franchises are a very common way to run a business. Most big cities have a lot of franchise stores, and it’s hard to go more than a few blocks without seeing one. McDonald’s (NYSE: MCD), Subway (NYSE: SUB), UPS (NYSE: UPS), and H&R Block (NYSE: HRB) are all well-known franchises (NYSE: HRB).<\/p>\n\n\n\n

You can get a franchise in almost any business you can think of. Creating a franchise with one’s own product and brand name is one way for a business to get a bigger share of the market or expand its reach without spending much money. The original company, called the franchisor, sells franchises to new businesses. <\/p>\n\n\n\n

A franchisee is a business owner who has paid the franchisor for the right to sell the franchisor’s products or services using the franchisor’s brand and business model. The way to start a franchise is very similar to how to start a business from scratch. When you buy a franchise, you get established customer recognition and a tried-and-true way to run your business right away. <\/p>\n\n\n\n

More Information<\/h3>\n\n\n\n

One benefit of having a stand-alone store in a larger chain is that you already have customers. There is no minimum credit score that everyone agrees on to become a franchisee, but most require a score of 680 or higher. But there may be hidden costs and things you need to get ready for ahead of time. These are the main costs of getting a franchise up and running:<\/p>\n\n\n\n

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  • A franchise might cost between $20,000 and $50,000 to start up.<\/li>\n<\/ul>\n\n\n\n
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    • As a bare minimum, a service business should have between $50,000 and $60,000 in liquid assets, and a facilities-based business should have between $75,000 and $100,000 in liquid assets.<\/li>\n<\/ul>\n\n\n\n
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      • “Franchise royalties” are fees that must be paid on a regular basis. They range from 4 to 12 percent of a franchise’s gross income.<\/li>\n<\/ul>\n\n\n\n
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        • A franchise requires an initial investment and ongoing costs, like renting or buying a storefront, paying employees, and advertising.<\/li>\n<\/ul>\n\n\n\n

          Requirements to Start a Franchise<\/span><\/h2>\n\n\n\n

          There are many steps to take after deciding to start a franchise business. To meet the franchisor’s requirements, you will need to carefully plan every step of the process, from choosing a location to getting the permits and lease agreements you need. Here are some of the most common requirements to start a franchise:<\/p>\n\n\n\n

          #1. Check the Prices<\/span><\/h3>\n\n\n\n

          When looking into franchise opportunities, you need to keep track of a number of different costs. In addition to the normal costs of running a business, the franchiser must be paid a royalty every year. There are also extra costs, like transportation, company training, and any local taxes.<\/p>\n\n\n\n

          #2. Make a Business Plan<\/span><\/h3>\n\n\n\n

          Even though a lot of the business has already been decided, you are still in charge of the most important parts. Your business plan is your chance to show why you would be a good person to run the company’s resources. You should also say more about what you want for the neighborhood you want to move into. Since you’re the expert, it’s best for the franchise to listen to you.<\/p>\n\n\n\n

          #3. Get the Franchise\u2019s License Agreement<\/span><\/h3>\n\n\n\n

          Most of the time, a franchisor will give a franchisee a contract that explains how the franchisee is expected to run the business. Before you sign, read it carefully and make sure you understand all of the requirements. Find out what the franchisor wants from franchisees and make sure you’re sure you can meet those expectations.<\/p>\n\n\n\n