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How to Start a Franchise:
A Step By Step Approach for Beginner Entrepreneurs
I've written this page to show you how to start a franchise or buy a franchise business. It's designed for the beginner entrepreneur. Franchising your business is often possible if you follow some logical steps and a systematic approach. In the text that follows, I'll give you some honest and friendly advice. I’ve built my own multi-million dollar turnover franchise business from scratch, and so can you.
How to Start a Franchise Through Buying Into an Existing Brand
You can start a franchise by simply buying into a brand that someone else has already established, and if that’s the route you prefer to take, then
click this buy a franchise link
where I discuss what to look for when you choose a franchise. You'll also find links out to a range of carefully-selected franchise opportunities.Before we get cracking, here's some friendly advice for you. If you decide to buy a ready-made opportunity instead of opting to start a franchise using you OWN existing business, then as a first step, you absolutely MUST take a look at the UFOC's of every franchise business you are interested in. It's short for Uniform Franchise Offering Circular, and it's a business document that's utilized by franchising organizations in the United States. I hope you'll find the following link useful. It makes it simple and easy for you to source these vitally important documents at the lowest possible cost... 
How to Start a Franchise Using Your Own Business Idea
For a growing number of beginner entrepreneurs, the idea of learning how to start a franchise using your own business idea often has more appeal and exciting possibilities attached to it. The trouble is, there are very few honest and straightforward sources of help and advice to tell you step-by-step how to start a franchise. There are franchise consultants a plenty out there, who can assist with franchising your business, but they are expensive and, even if you do wind up employing one further down the line, you’ll save a ton of money if you’ve done some of the initial structuring and planning work yourself. And if you know what to do, then much of how to start a franchise can be fairly straightforward and enjoyable. That’s where this website entrepreneurbeginner.com can step in and help.
What is a Franchise?
When I first came across the word a good few years ago, I didn’t quite know what it meant, and so I figure that it may be the same for you, as you start explore how to start a franchise, so here goes with a simple explanation of what is a franchise:A franchise is a tried and tested business system - or way of doing things - that, if instructions are followed carefully, will produce a predictable result every time.
What is a Franchisor?
A franchisor is the person or company who has developed the system and is seeking to sell the opportunity to others, who can then use it and profit from it.
What is a Franchisee?
A "Franchisee" is the name given to these users, who are often entrepreneurial individuals who buy the right to use and profit from the business system.
How do the Financials Work in Franchising?
Franchisees will typically pay an initial franchisee fee to the franchisor, followed by an ongoing monthly royalty which is calculated on a percentage of monthly turnover. Sometimes this royalty is called a “management service fee”.The franchisee agrees to run the business to the franchisor’s agreed standards, and do things the franchisor’s way. In return, the franchisor agrees to help and support the franchisee, in a bid to assist them in growing their turnover. The more money that the franchisees make from the system, the more royalty the franchisor makes, and so it’s a classic win-win situation and why learning how to start a franchise can be so financially rewarding for the beginner entrepreneur.
The Essential Franchise Documents
The relationship is governed, in its simplest form, by two documents. The first is the “franchise agreement”, which sets out what each party agrees to do (and not to do!). The second is the “operations manual” which is like a very detailed instruction book for the franchisee on how to run the system and get the best from it. They are the crucial elements in the process of franchising your business.
My Own Successful Rock and Roll Franchise.
I Succeeded and So Can You!
I have been a successful franchisor (which means the company that owns the brand and the outlets), with dozens of successful franchisees (the individuals who buy the business system from you), operating well over 60 trading outlets. My franchise business is rockschools; teaching kids to play guitar, bass, drums and keyboards and jam and gig in rock bands.
You can visit Clive’s Easylearn Rock and Pop Schools website from this link to take a look if you like.
I'm very proud to say that recently I won the HSBC Award for Enterprise for my franchise business, and I’ve been one of the Franchisors of the Year in the UK. But the point is, I started the whole multi-million dollar business from a spare bedroom, and so can you - really, you CAN. It’s entirely possible to systematically learn how to start a franchise.
Franchising Your Business?
Could You Use My Help?
I had to learn how to start a franchise the hard way, from trial and error, tripping, falling and getting up once more to try again until I had eventually got the balance just right and became an award winner. What I hope I will be able to do here, is give you an overview of how to franchise a business, and avoid all the tripping and falling. If you decide that you want to go deeper into the concept of franchising your business, then
I can help you personally one-to-one, through my membership site www.turnitintoafranchise.com which you can link to from here.
I encourage you to take a look at what’s on offer.
The Franchise Mindset
To learn how to start a franchise business, you need to adopt the mindset of a teacher. Whatever your business model is, right from the start, you need to be aware that for it to succeed as a franchise, you will have to be able to teach lots of other people exactly how to run it. And note the word “exactly”...
Exact Systems Equal Success
As you set about franchising your business, it’s not enough for your franchisees (the people who buy the opportunity to run “clones” of your business), to operate them ROUGHLY the same as what you had in mind. They need to run them PRECISELY, exactly the way you have planned them to be, so that the customer receives the same, predictable experience every single time he or she buys. In this way, the customer starts to trust the “brand”, recognizes its unique selling points (usp’s) and returns to it time and again because of this.
The System is The Solution
Here’s a good, simple example to keep in mind when you’re franchising your business: McDonalds. Wherever you are in the world, when you walk into a McDonalds burger restaurant, then the food will be the same. And this is no accident. The Big Mac will be just like you expect it to be; same bun, same burger, same double-decker design, same garnish, same mayonnaise. You could be in Russia, the UK or California. The same. Identical. How do they do that? Actually the concept is quite simple - there’s a “Franchise Operations Manual”. The business bible. A key element in how to start a franchise.
Your Operations Manual
The operations manual is the backbone of every successful franchise operation in the world. It contains EXACT procedures for doing EVERYTHING associated with the business. From saying the right things to customers when they arrive, to how the store must look, to what the staff must wear, to the way the product is produced and delivered, to how things have to be cleaned up afterwards to.... well, you get the idea. Nothing, absolutely nothing, is left to chance.With this in place, and a good ongoing support system from head office (you), a customer should be able to perceive no difference, whenever and wherever he or she goes to buy the product or service. The operations manual is a vital document, and the backbone of how to start a franchise.
The Turnkey Business Model
The best franchises are like well-oiled, perfectly engineered engines. You just turn the key and they start-up, predictably, perfectly, every time. In fact, you may hear franchises referred to as “turnkey businesses”, for this very reason. You must aim for the same thing when you are franchising your business.
Systemize Your Business
So, the first thing you need to begin doing with your own business idea, as you learn how to start a franchise, is to begin to systemize things. A good approach is to work out a clearly defined way in which each element of what makes up your business can be replicated two, ten or even a hundred times, and delivered exactly the same by almost anyone, once they have been trained appropriately.
Document Your new Systems
If you don’t document and systemize everything, then quite simply, you don’t own it. Franchises are built on specific ways of doing things, so the first thing you need to do as you begin franchising your business, is list each of the procedures that go to make up what your product or service actually is, and start by trying to get them down on paper. Once you’ve done that, before you know it, you’ll have taken the first steps to writing your operations manual and learning how to start a franchise.
Test Your Systems
I think it’s a good idea to test each of your procedures with the help of someone that you know. See if they can follow your instructions and do something in the way you envisage.
The Franchise Pilot
The next step on from this is in franchising your business is to develop a “franchise pilot”. This is where you have other people run your business using your instructions, and where you start to identify what works, and what doesn’t. This allows you to fix things before you actually take your franchise system to market.
Many Business Types Can Be Franchised!
It’s surprising the huge range of business ideas that can be franchised if done in the right way. When I started to develop a franchise model for rock music tuition, the music teaching world said it just couldn’t be done and were very negative about my idea - music was “creative” and “couldn’t be systemized” they said. I set about proving them wrong and turned my idea into an award-winning multi-million dollar franchise. It took time (about five years altogether to develop the franchise prototype), and trial and error, but in the end it paid off. I learned how to start a franchise and so can you. It’s really not too mysterious.
Dedication to Detail
What you need more than anything else, if you want to franchise your business, is dedication and an almost obsessive eye for documenting detail. It can get tedious at times, but it’s essential.There are people out there who claim that they can write your operations manual for you, and I don’t doubt that some could be helpful in honing a bunch of detailed rough drafts into a more professional document, but beware of anyone who claims that they can write it for you and do everything needed for franchising your business. I believe that the only person really best suited to document your business and visualize it as a multi-site franchise operation is YOU. After all, you’re the one who invented it, who knows everything about it and how it should operate, look, generate money and so on. Later on in the “how to start a franchise” process, you will need some outside help fro two distinct professionals. These are...
The Franchise Consultant
This is a person who has lots of experience of franchising your business and putting turnkey business systems together that will work in your country. They are expensive. In England I’ve seen quotes of £50,000 (about $100,000) to get things done for you. This franchise consultant link will take you to my detailed franchise consultant page for more information on what they do. (LINK COMING SOON) To massively reduce this huge cost, the secret is to do everything you possibly can on your own so that, instead of having a franchise consultant do everything for you from the point that you BEGIN franchising your business, you bring them in once you’ve got all the basics in place, and when all you want them to do is cast a professional eye over things, and give it some final tweaking.
If You Need Some Help...
Up until now, there have only been two choices when you want to learn how to start a franchise; do it all on your own and then get that final tweaking from a franchise consultant, or get the consultant in from the very start and pay a fortune.I have tried to change things recently and what I can offer you, if you feel it’s useful, is the opportunity to have me work with you on your new franchise business cheaply, efficiently and professionally, across the Internet via my rather unique membership site called
www.turnitintoafranchise.com. Take a look and see what you think.
I am here to offer assistance to you, and believe that I can use my own franchisor experience to help you along as you set about franchising your business. And it’ll be the same honest and friendly, practical advice that’s made this website, entrepreneurbeginner.com such a success.
You'll Need a Franchise Lawyer Eventually
The second professional that you will need is a franchise lawyer. Their job, which typically comes right at the end of the process, is to draw up your “franchise agreement” which is a complicated and specialist document designed to protect both your own interests and also those of your franchisees, and to meet the legal requirements for franchising your business in your own local area.This document, that can run to around 45 pages, must be professionally drafted. Without a robust, well-written franchise agreement, your business will be on very shaky and potentially unethical ground.
Don’t Cut Corners With The Legal Stuff... Here’s Why
My franchise agreement cost around $10,000 to have produced, but is money well-spent. My advice to you is - don’t skimp on this by trying to write it yourself or using a template that you’ve found somewhere on the Internet (although that can give you some initial ideas), and don’t use a local general-purpose lawyer for the job, who is more used to doing conveyancing, wills or probate. Use a specialist franchise lawyer, who is used to drawing up agreements like this.Let me give you a personal example of how important a good agreement is. Many years back, when I first set up my rockschool franchise, and was learning how to start a franchise, I did try to cut legal corners, and I did use an “off the shelf” franchise agreement, but I soon wished I hadn’t... My very first franchisee exploited a weakness in the non-competition clause, which should be designed to prevent your franchisee from stealing your business system and setting up on their own in competition against you, and did just that - set up a rival business. We lost a lot of money - more money, in fact, than it would have cost to have had a proper franchise agreement drawn up in the first place! So, you see what I mean here - don’t try to save money on the legal stuff when franchising your business. It’s not worth it.
A Franchise Agreement Explained Step-By-Step
For more information about the sort of clauses you’ll see in a franchise agreement, then click the link below and I’ll take you step-by-step through what to expect.
A franchise agreement explained in simple, honest plain English.
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