How to Start a Franchise in 7 Strategic Steps

Franchising makes it possible to become an entrepreneur with a ready-made concept as part of a chain company. There are franchise chains in many different industries, such as the service industry, retail trade, and the restaurant industry. 

In franchising, the entrepreneur starts a company with an existing, tested business model and at the same time becomes part of a franchise chain. Seeing as franchising is based on an agreement between two companies, the person who becomes the franchisee must form a company before the collaboration begins.

Below we have outlined seven strategic steps to help you on the path to becoming a successful franchisee.

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Contact the franchisor

The first step that starts the whole process is contacting the franchisor or those responsible for the franchise concept you want to operate. Many of the large franchise chains regularly look for franchisees around the country, but certain franchises may not always be available in specific areas.

This may cause you to reevaluate either the area in which you want to operate or to look for other franchise openings. With many franchisors, however, you can register your interest in a certain area as they might be considering an opening in the future. 

To stay up to date on which franchise openings are available, it’s a good idea to regularly look through the franchise advertisements on the company site and subscribe to a franchise newsletter that highlights both franchise opportunities and related franchise topics.

Put a business plan together

As with any other business, when you’re looking to start a franchise, writing a business plan is essential. However, a franchise business plan is different from a standard one. This is mainly because you will need to sign the franchise agreement before being provided with crucial information such as the start-up and operating costs, as well as the marketing plan.

You’ll be given a franchise disclosure document that contains plenty of information to help you write a solid business plan.

When creating your business plan, give a brief overview of the franchise and how you plan to run it, and go into detail about your product or services, including market analysis, customer and competitive analysis, marketing plan, operations plan, information on the management team, and a financial plan. Also, remember to continually update the business plan so that it reflects your business’ developing needs.

Negotiate with the franchisor

Before an agreement is signed, some negotiations take place in the franchise world. The agreements drawn up between franchisors and franchisees are often standardized and equivalent for all franchisees in a chain, so its constituent parts can be difficult to influence. What is all the more important is that you, as a future franchisee, have a firm grasp of your commitments and obligations as well as the franchisor’s obligations toward you.

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Sign the franchise agreement

When you and your franchisor have agreed on your franchise arrangement, it’s time to sign the agreement. Assuming nothing unforeseen occurs, this is a fairly standardized document that summarizes the obligations and rights of the franchisor and franchisee. It’s only when this agreement is signed that you’re considered a full franchisee.

Undergo training

Once you and your franchisor have signed the agreement, it’s time for you to get training. Depending on the franchise concept, the training varies in scope. Some franchise training may even be conducted outside the country. This is also the time for you to set the business framework. You often get a lot of support from your franchisor in connection with the startup, which feels reassuring for many.

Find a location

Once you’ve signed all documents and secured the necessary funding, the next step is choosing the right location for your franchise. You might need to follow certain guidelines but other than that, it’s up to you. When choosing your location, it’s important to do your research to understand the level of traffic, competition, available parking, and what may be built 1-5 years from now around the area that could help or hurt your franchise.

Get ready for opening day

Once you undergo the training program provided by the franchisor, you should prepare to launch your franchise. Make sure you have the equipment you need, a well-decorated interior, and well-trained employees.

Put the time, effort, and resources into your franchise’s big opening as this will be the first impression your customers have. Social media marketing can help you spread the word about the brand and event, and attract potential customers.


A franchise gives you access to an already winning business concept; still, it’s no easy feat, and you should be ready to put in the time and effort to succeed. However, by following the steps above, you can stay on track for this exciting venture.