Starting a small business by obtaining franchisee of an established brand is a popular practice in the market. A franchisee runs an own business of selling products and services of that particular brand. It uses the trademark and support system of the franchisor and in return pays an initial fee and ongoing royalties. Here we are discussing five major steps taken for the purpose.
1. Look out franchise opportunities in your area. You can take the help of internet for this purpose.
2. Research about the business, industry and the demand of the product in your local market. Shortlist the best performing brands in the same industry that can be approached.
3. Evaluate the shortlisted brands based on their expansion plans, opportunities and support system they offer. Do your calculations with respect to investments, franchise and royalty fees, expected returns, sources of funds etc.
4. Ask the proper terms and conditions, marketing and other support systems available, other outlets planned in the same area for the competition point of view and future business plans of the franchisor.
5. Complete all legal and franchise formalities and start the business.