All About Franchising
Frequently Asked Questions
Would I make a successful franchisee?
Ask yourself the following questions: Am I passionate about owning my own business? Am I willing and able to follow a proven franchise system? Do I have a strong work ethic and a drive to succeed? Am I willing to always run my restaurants or retail franchise business in near-new condition, and hire a team that is vested 100% ? If you answered YES, franchising may be a great fit. Keep in mind, it takes a unique mix of business acumen, motivation, capital, and commitment to succeed.
What is Fransmart's role in the franchise sales process?
Fransmart is the exclusive franchise developer for our exclusive portfolio brands. If you’re interested in exploring owning a franchise with one of our brands, Fransmart will be your primary point of contact throughout the Discovery Process. We partner with our brands to streamline the qualification of franchise candidates to ensure a good fit between franchisee and franchisor. We facilitate your introduction to the franchisor management team at Discovery Day meetings. Our full-service franchise development team is comprised of experienced business professionals, and we’re here to help you by providing information and guidance throughout your Discovery Process.
As a franchisee, what questions should I consider when evaluating a specific franchise?
Among the points Fransmart recommends franchise candidates evaluate are:
- Why am I doing this? If a trading area can only be sold to one person, why should the franchisor award this territory to me over other candidates
- What experience is required to join the franchise system?
- Do I have a complete understanding of the business?
- When meeting the franchisor management team – who will I be working with?
- Who are the other franchisees in the brand’s franchise system, and have I spoken with them to find out what their experience is like, owning a franchise?
- Do I understand the financial commitment?
- Have I completed a thorough review of the Franchise Disclosure Document (FDD)?
What kind of investment is necessary to buy a franchise?
Each franchise will have a different set of financial requirements necessary for qualification. Each franchise applicant must be qualified for entry into a franchise system by demonstrating they possess the necessary working capital. Total net worth and liquid assets are the two primary financial criteria Fransmart will review. For full financial requirements and fees, always refer to the Franchise Disclosure Document. If you’re building a multi-unit business, beyond the hard-costs of each location, you must have adequate working capital for soft-costs associated with your multi-unit business, including hiring the right people, executing your business plan, and properly training your team.
What are some of the benefits of owning a franchise?
Most business experts agree that franchises have a higher likelihood of success than independent businesses. Why? That’s because a proven business model is already in place, and has been tried and tested. Franchises also offer additional benefits like group purchasing power, brand recognition, and franchisee support. Franchisee support is the critical component of successful franchising. Franchise brands provide initial business start-up assistance ranging from strategic guidance, to real estate selection and negotiation, to access to suppliers and equipment programs, to ongoing training and marketing support. The franchise model works, because franchisors are only as successful as their franchisees. Thus, franchise companies provide extensive support to their franchisees to help them succeed.
What are some of the drawbacks to owning a franchise?
Franchisors require franchisees to follow their standard operating policies and procedures, in order to maintain brand consistency across the chain. This can be a challenge for independent-thinker types who like to create their own systems. Franchisees must be willing to follow a system in order to maintain the level of service and brand standards already established. Franchisors will expect you to meet operational excellence standards; you will be routinely monitored and evaluated by **** secret shoppers. Most franchisors also charge ongoing royalties, in exchange for providing ongoing support, services and marketing for their franchisees. As with any business, owing a franchise also carries a risk of failure.
What is a Master Franchise?
Master franchisees typically purchase the rights from a corporate franchisor to develop and own an exclusive franchise territory (usually a major market or region). They then sell portions of this territory to their own new franchisees. In this model, a master franchisee functions as a ‘sub-franchisor,’ splitting the roles and responsibilities (as well as franchise fees and ongoing royalties) with the corporate franchisor. Master Franchising is the primary “wealth-building” model available in the franchise industry today.
What is Blitzscaling and what does it mean in franchising?
The concept of blitzscaling is an idea or way of taking your liquid capital and investing it into a potential franchise concept. From there, when you invest into a franchise you take the profit you made from that one franchise and then you reinvest it into an additional franchise. See our blog post on blitzscaling or watch our two-minute franchise blitzscaling video to learn more.