How Easy is it to Set Up a Franchise

Franchises are entrepreneurial opportunities that let you use the established brand and model of another company to start your business. In many ways, a lot of the work is already done for you with a franchise, however, that does not mean that you do not need to still put in the work to make it successful. You may be asking yourself; “how easy is it to set up a franchise?” and while operating a franchise still takes work, there many success stories across South Africa to show that you can succeed.

Starting a franchise comes with the benefit of starting a business with pre-existing brand recognition, processes and plans. With this being said, starting a franchise is still not easy or cheap. There are a number of requirements you will have to meet. You will be required to prepare statutory franchise documentation, including a Disclosure Document, Franchise Agreement, and Operational Manual for your franchise…and this is where Franchise Administration can assist you.

While franchising is easier than building a brand from the ground up, it takes research and business acumen to find the right franchise for you and to drive it to success.

Just How Easy it is to Set Up a Franchise…

Research Franchises

Key points to consider when deciding on a franchise opportunity include:

• Industry fees;
• Liquid capital needed;
• Average monthly/yearly revenue;
• Royalty fees;
• Marketing fees; and
• Other fees.

Evaluate Opportunities

Before you start a franchise business, you should evaluate that one does not already exist in the area. This stage is important to ensure that you set up the franchise in a location where it can perform at its best.

Evaluate Costs

When looking to set up a franchise business, you’ll have to be on top of various costs. In addition to regular business costs such as rent and maintenance, you have to pay a yearly royalty to the franchisor. Other costs include travel, company training, and paying local taxes to start the franchise.

Draft a Business Plan

Even though many aspects of the business are already defined, you will head the most important aspects of the business. Drafting a business plan will assist to guide you on daily operations, among other key considerations. Moreover, it is also important to explain in the business plan how you understand the community you wish to serve with your location.

Franchise License Agreement

The franchisor has a contract that they provide to franchisees in order to run the business. Before signing, make sure to read it over and understand all of the standards expected of your location. It is vitally important to know what business standards the franchisor has for franchisees. Make sure you are comfortable with them in upholding the business.

Form a Business Entity

It is now time to form a Private Company or Corporation. Franchisors require different business entities based on their overall structure. Either way, these businesses mean you can start categorising your business expenses.

Choose the Business Location

When you have the business operations in place, it is time to look for a business headquarters. The franchisor may provide guidelines on the kind of space you will require, in terms of size and setup.

Hire Employees

Once you have your agreements and a location in place, you can start sourcing employees. The franchisor may have established job descriptions and titles so it will be easier to post the job openings and start searching for good employees.

For more information on how easy it is to set up a franchise – Contact Franchise Administration