What Happens After You Buy a Franchise?
After the Paperwork Has Been Completed
A fairly sizable check has changed hands and mountains of documents have been initialed and signed. You are now the proud owner of a franchise operation. It might be a retail store, a mobile business, or perhaps something you can do from home. Maybe it’s a restaurant, or a house-painting business, or a daycare center, or a computer consulting operation. You have been planning for this moment ever since you cruised the Internet in search of just the right business to own. You’re clearly ready to make the next move.
Five Franchise-Opening Steps
From the time you buy your franchise to the actual first day of business, there are a number of tasks to be completed. These can be grouped into five basic steps:
1. Establish Your Physical Franchise Location
Many , especially those that deal with the retail public, require some form of location from which to operate. This could be a stand-alone building or one unit in a strip mall. Even a mobile business – think windshield repair or home decorating consultant – has a need for a base of operations, even if it’s only a sectioned-off part of your garage. If the type of franchise you bought demands a storefront, you will need to buy or lease a building, or else build one. Franchisors will prove incredibly valuable in this aspect of getting your business off the ground. Most have real estate experts on staff to help you find the best location, negotiate a lease on your behalf, and act as consultants for the build-out and remodeling. Even if you’re running your franchise from home, your parent company can offer suggestions as to how much square footage you will need to devote to a management area, plus providing the most efficient layout for your equipment and inventory storage.
2. Undergo Extensive Training
Depending upon the nature of your franchise and how complex a company it is, your training may last a couple of days or the better part of a month. Most training sessions are conducted at the company’s home or regional office and usually include a certain amount of time spent with existing . You will learn day-to-day operational methods and other “tricks of the trade,” plus there is often extensive classroom time to review accounting procedures and marketing and merchandising elements. This is an opportunity to learn as much as possible about owning a franchise and operating it in the most successful manner possible. Additional assistance is often provided once your location is ready for business – so-called onsite training – and very often someone from the parent company is available to work with your employees as well.
3. Execute Your Spending Plan
You will have paid your franchise fee at the time you signed the purchase agreement. But there are other financial burdens to be assumed before you’re ready to make your first sale. While you will have lined up the proper amount of financing in advance, the period of time between your actual purchase and opening day is when you will spend a great deal of money. There is equipment to buy, supplies to stock, and advertising to arrange. Even if your franchisor looks after some of these expenditures as part of your grand opening agreement, everything tends to cost more and take longer than initially expected. This part of the pre-opening ritual has the potential for causing the greatest amount of grief, so be prepared for delays and plan accordingly.
4. Hire Your Staff
Unless you expect to run your franchise all by yourself, you will have employees to hire and train. Most parent companies outline specific steps for their to follow during the hiring process, from standardizing help-wanted language to employment forms designed by the home office. Especially critical for someone who has never run a business, following these steps exactly is important in order to avoid a potential violation of employment law. Knowing which questions you can ask and what criteria are inappropriate to choosing an employee will help you avoid legal entanglements.
5. Train Your Workers
After undergoing intensive training at the home office, the new must pass along what he or she has learned to the rest of the staff. You will want to prepare someone as an assistant manager to take over in your absence, or when things get really busy. You will also want your employees to know everything possible about the business and your product or service. The more informed they are, the better they can serve your customers.