What is Franchising?
Franchising is a business strategy in which a corporation licenses its trademark and business system in exchange for a licensing fee or a certain percentage of revenue. There are two parties involved in a franchise agreement: the franchisor, the individual or company that owns the trademarks and business system, and the franchisee, the one who gets the license from the franchisor to own and operate the business.
Six things you should do before your meeting with a franchisor
Do your research
Research is perhaps an essential activity you can undertake before meeting with a prospective franchisor. Since you’ll be investing your time, money, and effort into managing your franchise, you must truly get to know the industry you want to invest in. Look up the industry size, current trends, and overall history to know what to expect. Franchisors look for people who know what they’re getting themselves into, so alongside the benefits of franchising, you’ll need to get familiar with the downsides as well.
Along with general knowledge about franchising and the industry, make sure you research the company you have your eye on as well. Familiarise yourself with the company’s corporate culture, organisational structure, competitors, history, and future plans. Having all this information will prove your determination and competency to the franchisor of running their outlet.
Analyse your strengths and weaknesses
Before interviewing with a prospective franchisor, you need to be well aware of what skills and experience you possess and how you can improve upon your weaknesses. While franchisors might not always ask for such details, you can have a competitive advantage against other aspiring franchisees if you’re able to demonstrate the use of your skillset effectively.
However, franchises like JAN-PRO Cleaning & Disinfecting require no experience and offer full training and mentorship to guarantee your success.
Evaluate your financial situation
Franchising is by no means an easily affordable business strategy. If you’re serious about franchising, you’ll need to conduct a thorough analysis of what your current financial situation is like. If you don’t have the necessary capital to purchase the franchise, your franchisor can help arrange loans for you that can add to your budget. Since entrepreneurship is generally a risky business, we suggest that you forecast your expenses, cash flow, capital expenditure, and invoices up to six months in advance before starting the franchising process.
Get into contact with your other franchisees
Networking is one of the most effective strategies to improve your skills, advance your career, and dominate any market. The importance of networking carries onto franchising since we highly recommend that you contact existing franchisees of the business you want to be a part of. This act will help you gain more knowledge about the industry and the company, highlight your commitment to the said corporation, and even help you develop valuable linkages along the way.
Go through the Franchise Disclosure Document
The Franchise Disclosure Document (FDD) is a legal disclosure document of extreme importance that you absolutely need to go through. This is because this document will give you important insight into whether or not you should make the final purchase of the franchise. It will give you more information about what you’re signing up for and can also clear up any misunderstandings you might have about the franchising process.
Once you have the document, read all the clauses carefully without skimming through any detail as doing so might cause you unnecessary loss. If any term stated that you have trouble understanding, you can always consult your franchise consultant and/or lawyer for clarification. In addition to this, make sure that you don’t make any payments or sign any contracts with the franchisor until and unless you have received this document.
Prepare questions to ask the franchisor
While this isn’t absolutely necessary, we still recommend you note down a few key questions to ask the franchisor. Sure they’ll be assessing your ability and competency to handle their franchise, but you’ll also be evaluating the worth of owning that franchise, to begin with. You want to make an investment that yields a high return, so get that list of questions ready and make sure you put them forward whenever you get a chance in the meeting. Your questions might include information about the franchise’s location, success rates, methods of protection, current disputes against the business, competition strategy, etc.
A final word
Whether it’s a cleaning franchise like the ones we offer at JAN-PRO Cleaning & Disinfecting or any other franchise of your interest, these are six key things that we definitely recommend you to do before you’re meeting with a franchisor. Wear your best and smartest suit, hold your head high, and march into the office with as much confidence as you can muster! As long as you’re well-prepared for the interview by following our tips, there’s no doubt that you’ll be able to get the best out of your meeting.