Your Ultimate Guide to Buying a Franchise

Guide to Buying a Franchise. Group of confident business people in formalwear sitting at the table together and discussing something while looking at the laptop

Franchising is a smart way to start a business, but a number of important decisions must be made before investing a large amount into buying one. In this guide to buying a franchise, we’ll understand what a franchise is, how a franchise runs its business, and the steps needed to buy a franchise.

What Is a Franchise?

A franchise is a license that permits a product or service to be sold under the franchisor’s brand name while also providing access to the franchisor’s unique business knowledge, methods, and trademarks. To open a franchise, the franchisee usually pays the franchisor an upfront start-up fee as well as annual licensing costs.

They offer their business model, intellectual property, patented name, reputation, and credit to another party called a franchisee, who uses the resources in turn to start a business according to the existing system.

Franchise vs. Starting from Scratch

Starting one’s own business is very different from owning a franchise. When you start your own business, you build everything from scratch. You decide the name, logo, and brand style. You manage the creativity, execution, and everything that goes with it.

Starting your own business is also a long process. You have to figure out everything from product offering to market to price. There’s also a big possibility that your business idea might not work. If you have never been in business before, starting from scratch can be overwhelming.

However, with a franchise, there is no need to start a business from scratch. Franchising allows you to use their name, branding, marketing support, and reputation to get a headstart. 

This makes starting a business much easier. If you’re a first-time entrepreneur, getting a franchise from a reputable franchisor can be one of your best investments.

Franchising Requirements

While franchising is often a smoother path, there are still requirements that must be considered. 

A franchisee will typically pay a commission or a one-time fee, called a lump-sum contribution, to the franchisor. The franchisee also would pay for any construction and equipment needed to open the business. During the partnership, the franchisee shares a certain percentage of revenue (gross income) with the franchisor. This fee is called a royalty or licensing fee.

A Step-by-Step Guide to Buying a Franchise

Now that we know what a franchise is, let’s look at how to secure a franchise business.

1. Be Confident in Your Decision

Owning a franchise requires a lot of attention, be it mental, physical, or financial; so be confident in your reasoning and analysis before owning one. You have to be sure that you’re up to the task!

2. Critically Research Which Franchise You Want to Own

The popularity of any brand name or franchise doesn’t make it the right choice for you. Spend a good amount of time researching before owning it. Here are some things that you should consider before deciding which franchise to buy:

  • Sales: Choose a franchise that has a solid track record of sales. 
  • A Growing Market: Getting started in a profitable market that might not exist two years from now is not a smart investment. Consider a franchise that is working in a growing market.
  • Competition: In every business, there will be competitors, but too much competition in close proximity might cause your business to fail.
  • Franchise Fees: Consider your financial investment and what you will receive for it. You should expect great training, marketing, and support.
  • Background Check: Speak with an existing franchise owner who can help you determine whether this is a business that you are passionate about, and if it is something you can and want to pursue.
3. Application Process

Just like the franchisee screens the franchisor and the franchise before investing, the application process is where the franchisor investigates the franchisee.

Review and return your franchise paperwork carefully and analytically. These contracts tend to be long and include complex language, so it may be beneficial to consult an attorney to help with this process.

4. Training and Support

Getting the training required can entrench a franchisee into the business. It will help with:

  • Branding and marketing
  • Products and services, including how to sell them
  • Payment technology, i.e., credit card processing
  • Sales tactics for this specific business model

Pursuing STEM Franchise Opportunities

The iCode franchise is among the best education franchise opportunities. They’re committed to helping you build a successful business in one of the fastest-growing industries in the world.

Those interested in technology, who have an interest in educating children, and who have a good grasp on how business works will be well suited for this franchise opportunity.

Are you ready to pursue successful franchise opportunities and inspire the next generation of young minds? Learn more about opening your iCode School today!

Recommended Blogs

In a world where financial stability is becoming increasingly paramount, side hustles are no longer a novel concept but rather a strategic component of many individuals' income streams. But what makes a good side hustle and how does it fit into a broader financial plan? One interesting thought, have you ever considered owning a franchise as a viable side hustle? This prospect may seem daunting at first, but with the right franchise and the flexibility to be as involved as you want, it could potentially become a lucrative addition to your income. Let's take a look at the potential of franchise ownership as a side hustle, focusing on the thriving sector of STEM education franchises, and examine some key insights to help you make an informed decision. Understanding the Concept of a Side Hustle A side hustle is any type of employment undertaken in addition to one's full-time job. It's essentially an entrepreneurial venture that allows you to earn extra income while retaining the security of your primary job. Side hustles have been growing in popularity, particularly due to the changing dynamics of work brought about by digital technologies. In the gig economy, where project-based or temporary jobs are common,…
The thought of becoming a business owner can be both thrilling and daunting! Many people want to start their own business but are confused about how to get started. This article will help you understand what it means to own a franchise, decide if becoming a franchisee is a good fit for your objectives and personality, lead you through the entire process, and reveal the best franchises to buy in 2023. What Is a Franchise? A franchise is a business wherein the owner of a brand and business model grants you the rights to use these assets (together with all associated trademarks, goods, systems, and so on). The franchise owner is the franchisor, and you are the franchisee. Getting started with a franchise is a much easier task than starting something from scratch which is one of the biggest reasons many people opt for franchising over starting something of their own. A Step-By-Step Process to Buy a Franchise Understanding what’s involved with starting a franchise can alleviate a lot of the stress and help you discover the best franchises to buy in 2023. Step 1: Know Your Why Owning any business can be an emotionally, physically, and financially exhausting experience.…
Franchise Buying 101 Want to start a business but not sure where to start? Have you considered buying franchise businesses, but you’re not exactly sure how it works? First things first: How do franchises work? A franchise is a proven business model where you leverage the power of an established system and brand to help you turn a profit without having to figure everything out on your own. In this article, we’ll take you through the process of buying a franchise company, explore the costs involved, and answer questions you might have before jumping in. When to Buy a Franchise Before you make a decision, it helps to consider when you should buy into a franchise opportunity. When is the best time for you? To make that decision, you’ll want to consider your circumstances, financial situation, and business goals. To start, ask yourself the following: Do I have enough money saved for startup costs and ongoing expenses? Do I have access to financing? Do the market conditions in my local area make sense for this right now? Is this business model feasible within my current lifestyle and goals? Will my past experiences support my success in this venture? Does the…

Request Franchise Information

"*" indicates required fields

Do You Meet the Following Financial Requirements?
$100K Minimum Cash Liquidity?*
$500K Minimum Net Worth?*

Please review the estimated required initial investment here in preparation for your call.