How to Be Part of a Franchise
Individual businesses like Subway or Little Caesar's Pizza operate under franchise agreements with their location owners. The person who sets up an individual location licenses out the trademarks and business operating methods of the larger corporation and becomes part of that family of stores. You can also be part of a franchise, so long as you contact the right people to get the process started. Does this Spark an idea?
Instructions
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Go to the "Franchise Opportunities" website for the franchise you'd like to be a part of. Most franchises have informational pages online designed to fill you in on exactly what you need to do to be a part of your franchise and exactly what will be expected of you. For example, the fee to purchase a new franchise from McDonald's is $45,000 as of March, 2011. This does not include the cost of renting or buying a physical location and starting your business, which you will be responsible for. You will also pay a monthly service fee and operational fees, including a portion of your profits, to McDonald's each month. The amount of these fees varies based on your income and your location.
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Read over the franchise requirements. Determine if becoming a part of this particular franchise is something you really want to do. For example, to own an already existing McDonald's franchise you will have to provide a down payment of 40 percent of the cost of the franchise at the time of purchase. To become part of an Ace Hardware store franchise you are required to provide a $5,000 application fee, a stock purchase of $5,000 and an initial capital requirement of $250,000.
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Fill out your franchise application. McDonald's and Subway are two examples of franchises that allow you to submit this form over the Internet. Ace Hardware is an example of a franchise that requires you to mail your application along with the mandatory $5,000 application fee.
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Determine the amount of outside financing you need to obtain on your own, aside from the initial franchise fees. When your application is accepted the company you are working with will provide an extensive training session to get you ready to be a franchise owner. This includes helping you figure out how to get financing, how much you'll need, how to order inventory, how many people you need to hire and other factors of running a business.
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Tips & Warnings
Have a contracts attorney read over your franchise agreement and general contract before you sign it. This can help identify anything in the contract that may not be to your benefit, or anything that would appear "unusual" to a professional.
