When
is the best time to open a franchise
business?
This
can be an important criteria
in your selection of a franchise.
Some franchises, particularly
those which provide services
rather than goods and can be
operated from your home, can
be up and running very quickly.
Others, like chain restaurants
which have their own specific
building style (i.e. McDonald's),
will require a considerable
delay between obtaining the
franchise and opening its location.
You should discuss this question
with your franchisor before
agreeing to purchase the franchise.
If
you wish to generate income
within a short span of time
you should not purchase a franchise
which will require the erection
of a new structure and its equipping.
Obviously the fastest and most
efficient way to have your business
up and running quickly is to
purchase a resale franchise.
First,
let's look at this question
from your viewpoint as a would-be
franchisee. Do you need to have
your business generate income
immediately?
If so, why? If you are in a
position whereby you can't survive
without this income your financial
position may not be such that
you should consider purchasing
a franchise.
Newly-opened businesses often
do not show immediate profits.
You might, in this instance,
need to continue at your current
place of employment and save
as much as possible to put yourself
in better financial shape before
becoming a franchisee.
If, however, you still want
to get something up and running
quickly look for a franchise
which you can operate from home
or from a small storefront with
minimal renovations. Choose
a field where you already have
the knowledge and skills required
as well as all, or most of,
the tools and equipment you
need to do the job. Hopefully
you will also have existing
or potential clients lined up.
This way you can open your doors
and go right to work only a
short time after signing the
franchise agreement.
On
the other hand, you may have
considerations which necessitate
a broader time frame. You may
not be able to leave your current
employment immediately for any
number of reasons; you may have
other commitments which don't
end until a future date or you
may have personal reasons which
negate the ability to select
a specific date (such as moving
with children in school or your
partner's employment commitments).
In these cases a longer time
between signing the franchise
agreement and actually starting
your operation might be advantageous.
In any case, one of the important
things to discuss with the franchisor
you have selected is the amount
of time between obtaining the
franchise and having the operation
running. This would entail defining
both the minimum time (how quickly
they can guarantee you can be
in operation) and the maximum
time allowed (what is the longest
they will wait for you to get
things going).
Remember,
this is also an important consideration
for the franchisor! He or she
may have reasons of their own
to want the business up and
running as quickly as possible.
They may want to establish their
name in a certain area and be
the first to offer a given product
or service. On the other hand,
they may have reasons to delay
the opening.
Their product or service may
be of a seasonal nature or the
clientele they expect may not
be available until a new housing
development or apartment building
is erected and populated. There's
no point in opening a Christmas-themed
outlet in June (though there
are some exceptions to that
nowadays!) or opening a fast-food
outlet when the customers are
still represented by surveyors'
stakes and "New Homes For
Sale!" signs. In some cases
franchises are offered on a
"turnkey" basis (that
is, you as the franchisee will
get a ready-to-operate location
so you need only "turn
the key," open the door
and start to work). There still
may be a delay, however, if
the location has to be constructed
or renovated by the franchisor.
This may be accomplished faster
than you could on your own,
given the franchisor's experience,
connections and possibly staff,
but it will still take time.
In
any case, it is important that
the wants and needs of both
franchisor and franchisee match
as far as the time between the
granting of the franchise and
its grand opening. It is especially
crucial that you, as the franchisee,
establish what the franchisor
wants or expects and his or
her reasons for those expectations
|
