New Franchisee Requirements 101

When people hear the word “franchise” the first thought for most people is fast food. However, there are many opportunities available that do not involve a drive-through window and inexpensive burgers.

A franchise is a contractual relationship between an individual (franchisee) and a business (franchisor). The contract allows the franchisee to distribute the products of the franchisor using its name and brand.

While trying to determine which industry to become involved with as a franchisee, there are multiple things to consider; The investment required, training given by the franchisor, the competition that already exists in your area, and the ongoing costs affiliated with becoming a franchisor.

Here at Foxie, almost all of us currently run our own businesses and understand the rules and requirements that exist when becoming a franchisee. We have compiled a list of five things for you to consider before embarking on your journey of becoming a franchisee.

1. The Cost – There are many initial startup costs associated with your franchise. Some of the most common are:

• • Franchise Fee – This is a flat fee that any potential franchisee pays up front to operate the franchise. Fees can range from $20k up to $100k depending on the size of the franchise.
  • Equipment and Supplies – The franchisor will tell you what equipment you will need and the cost. Most will help you to obtain it, even offering financing options for these initial expenses.
  • Location – The franchisor will be a big help regarding what type of locations are best for your franchise. Some franchisors have strict guidelines. One major franchise (with delicious french fries) requires you to have a building with a minimum of 4,500 square feet and onsite parking.

2. Franchisor requirements – Quite often, a franchise has minimum requirements that are required of a potential franchisor before they can offer a franchise agreement.

• • Is your net worth sufficient?
  • Do you have industry experience?
  • How much cash do you have available?
  • What, if any, are your other sources of income?

3. Franchise Disclosure Document – This document will provide the potential franchisee with all the information they will need to decide whether to enter into a contract with the franchisor. This should include all information regarding initial fees, the initial investment required, and much more.

4. Training – Now that you have made the decision that this franchise is for you, it’s time to familiarize yourself with your new business. All franchisors should offer training sessions for you and your new employees so that everyone is aware of what you are selling, how to sell it, as well as all the company guidelines and policies.

Your franchise will most often provide training on all aspects of marketing, management, and other business basics you will need to be aware of to ensure the success of your franchise.

And after all of this….

5. Time to Open for Business – Now it’s time to market your Grand Opening. Franchisors often have pre-determined ads, signage, as well as promotions to make your Grand Opening a successful one.

Congratulations! You are now a proud new owner of a franchise. You have made the initial investment, trained new employees and you have a product that you believe in. Time to make some money!

Now that you are running a franchise...are you ready to improve communication with your customers and employees?

Allow us to introduce FoxieEngage.

Foxie has developed FoxieEngage, which is a single platform that gives you the ability to chat, respond to social media questions, text, talk, and communicate with your staff, customers, and vendors…all on their terms and in the way they choose to communicate with you.

FoxieEngage is what your business needs and what your customers and employees have been yearning for.

Be more engaged with your customers and employees...call us at 866-BE-ENGAGED (866-233-6424), text START to FOXIE (36943) or if you prefer just shoot me an email at mdahle@foxie.com.

We are looking forward to engaging with you soon!