How to Start a Franchise?

How to Start a Franchise?


Two independent parties to the franchise agreement named franchisor and franchisee are under a contractual arrangement that worked as a joint venture and allowed to use their respective trademarks or any sort of human intellect is called as franchise. The marketing strategy with an objective of business expansion is not only a contractual relationship but also upholds the franchisor’s brand value which is one of the popular tool. To excel in the business by mode of expansion franchise is one of the best options which can be achieved through scale the business model.  This write up is going to acknowledge about the franchise and its benefits and need to set up a franchise to business expansion. It will also allude the theme which is about the things need to take into consideration for setting up a franchise.

Establishment of franchise:  

The joint venture between the franchisor and franchisee is to meet the expectations of the brand of the franchisor company. The franchisor allows the other party to fulfil the contractual obligation with a purpose of entrepreneurship in this competitive business world by means of advertising, marketing and promotion.

Evaluation of cost:

Cost evaluation is the primary step to set up for establishment of a business or a small venture. The franchise fee along with supplies, equipment’s, and real estate is also need to take into consideration.   The floating cost that franchisee has to pay for pursuance of franchise opportunities. Hence the franchisor also considers the net worth, industrial experience, availability of cash along with the other sources of income.

FDD as an essential to franchise:

FDD which stands for Franchise Disclosure Document provide the contracts signed between the parties. It also acknowledges about the costs bearded for other legal charges, initial fees and investments as well.  The document which acts as a public document to the franchisee and allows him to enter into the contractual obligation vested through the agreement.

Review the agreement:

When the application is approved and cross checked by both the parties, franchisors provide franchise agreement which is the contract with the signature of the franchisee. It also provides an opportunity to hire a legal advisor to assist them with the terms and conditions of the agreement. 

 Selection of suitable Location:

It involves the purchasing the property, transfer of property, leasing or rent while fixing a suitable location. It put forwards the various practical legal aspects which may seem one of the obstacles while setting up a venture. Hence, the considerations given by the parties shall be given after reviewing all the documents properly.


For expansion of business into a big business venture the members and the parties to the contract shall undergo a training programme to ensure the new strategy its pitfalls and the expected success rate. To get acquainted with the new work culture all has to go through the basics.


After going through all the above mentioned procedures and steps the final step is to implement all in the new business.  Though it’s a business expansion method, it has to come across the public knowledge so marketing, promoting along with corporate consultant is important for running of the business smoothly.

Best time to start a franchise:

To establish a franchise which is a tiring process as it involves a lot of procedures and efforts to consider the suitable time frame to invest the inputs. When one finds a franchisor according to his preference with proper FDD one should opt for the new business expansion with reference to the legalities involved. Some of the legalities which can be complicated to understood by them.

Benefits of franchise:

Buying a franchise lead to many advantages as follows-

“Franchises offer the freedom of private venture possession upheld by the advantages of a major business organization. One does not really require business experience to run an establishment. Franchisors as a rule give the preparation you need to work their plan of action. Franchises have a higher pace of accomplishment than new companies. One might think that it is simpler to get finance for an establishment. It might cost less to purchase an establishment than go into business of a similar sort. Franchises regularly have a set up standing and picture, demonstrated administration and work rehearses admittance to public publicizing and progressing support.”


Unlike start up or to a new company that can take off on a careful spending plan, a franchise expects you to put your cash on the table like more evaluation of capital. At the point when one owns an establishment, he should be ready to play by specific principles. One can't add his own contacts with the goal of working on the brand[1]. A savvy establishment proprietor does exploration prior to plunging into the business. A complete exploration helps establishment proprietors survey their nearby commercial centre. Rick Grossmann from Franchise Hub says the “evaluation should include the suitability of the business model for the region, competitors and overall available customer base for the products and/or services.””

Leading franchise of the era:

“McDonald’s, Subway, Gourmet sandwiches which are not new to the youths of modern times. These brands are ruling over the arena off franchise as leading brands. The establishment plan of action is famous in exceptionally serious ventures like the cheap food industry, video rentals, and auto administrations. The model initially showed up in the US after the Civil War, and it acquired notoriety during the 1950s and 1960s through to the 1990s. Enormous organizations, for example, Dairy Queen, Taco Bell, Denny's, Jimmy John's, 7-Eleven Inc., Anytime Fitness, and so considered as top establishments around the world.”


Franchising is the diversified procedure about the franchisor's image esteem, how the franchisor upholds its franchisees, how the franchisee meets its commitments to convey the items and administrations to the framework's image norms and in particular – diversifying is about the relationship that the franchisor has with its franchisees.  Incredible franchisors give frameworks, instruments and backing so that their franchisees who can satisfy the framework's image norms and guarantee consumer loyalty. Likewise, two sides of a coin it has both its positive and negative impacts as well. To sum up with everything, it’s one of the best ways to opt for expansion of business.


[1]Subhomita Bose,10 Challenges Facing Franchise Owners (INFOGRAPHIC), SMALL BUSINESS TRENDS (Sept 30 2020),