What Is the Process for Becoming a Franchisee?
The first step is what you’re doing right this minute, as you read this article: research. Your decision on what type of franchise to pursue will come after much soul-searching — about what kind of business you want and whether you’ve got the attributes to go for it — and number-crunching. You’ve read article after article and picked the brains of people you know in the industry. You’ve visited restaurant after restaurant, getting an idea of what type of business you want to start. You’ve examined the possibilities of opening your own independent business, buying an existing independent, or opening a franchise location, and you’ve decided upon the prudence and potential of the latter. Congratulations; you’ve made a great choice.
Much more importantly, you’ve narrowed your search down to the exact brand you want to franchise. You likely were able to limit the number of brands you want to check out by setting your budget for the venture. Most franchise brands make their required investment levels publicly known, often on their franchise websites, to help you know in advance — and reduce the number of financially unqualified applicants.
What Is a Franchise Application?
Once you’ve chosen the franchise you want, filled out a request for more information, and, in many cases, spoken with someone who represents the brand and works with prospective franchisees such as yourself, you will most likely be asked to complete the brand’s franchise application. A franchise application in many ways is like a job application; or a shortened loan application.
Not all applications are the same, but you can expect to share more in-depth information about yourself. Most applications ask you to provide the city (or cities) and state(s) where you wish to open, whether you are married or have partners that will also be involved in the business, and financial information such as cash on hand, estimated value of investments, retirement accounts, bankruptcies, etc.
What Do They Want to Know?
At the application phase, you’ll need to impress the franchisor and stand out from the many people clambering to try to get one of their franchises. First and foremost, they will be looking to confirm that you meet their financial requirements, so it’s important that you are prepared to share this information. If you are financially qualified, you can stand out by talking about any previous (or current) business ownership, management or leadership experience, as well as highlighting the reasons you want to join the franchise and why you think you would be a good fit for their brand.
You’ve probably done a lot of fact-finding about the brand before filling out the initial contact form or request for information, but they are going to want to learn about you, too. They will want to know what kind of prospect you are — how interested and serious you truly are, what resources you have, and what your short- and long-term goals are. The company may look at your personality and work ethic. They will value a self-starter who takes initiative but also is willing to follow and operate in accordance with the brand’s best practices and guidelines.
What Happens Next in the Process?
Once you complete and submit the franchise application, it shows the franchisor that you are a serious candidate and are dedicated to the evaluation and discovery process. The franchisor brings a lot to the table — established systems, marketing, management techniques, purchasing power, and much more—but they will be meeting you halfway, so to speak, and will be closely evaluating your likelihood of success, in addition to assessing what they believe you can offer the brand.
Filling out the franchise application does not mean you have committed to signing a franchise agreement. Nor does it guarantee that the franchisor will grant you the opportunity to join the franchise. The completed franchise application is one of the tools the franchisor uses to determine your suitability for their brand.
If your application is accepted, you will be given the chance to move onto the next steps in the process, which typically include a Discovery Day and Franchise Disclosure Document (FDD) Review. Not all franchise discovery or evaluation processes are the same, but you may also be asked to present a business plan and establish a corporate entity before signing a franchise agreement.
How do I Cover the Initial Investment Costs?
Most new franchisees don’t have the financial resources to fund the entire initial investment on their own, but even if they do, many turn to outside lending sources to provide financing. Some people have the option to ask family or friends to loan them the funds to cover the initial investment costs, others tap into their 401K or retirement funds, and others use traditional lending institutions like local or national banks.
While many franchise brands have built partnerships with lenders and can help you start evaluating your financial options before you sign a franchise agreement, you may want to check out the SBA Franchise Directory. SBA-backed loans are a popular financing option for many reasons, especially for new franchisees. The “Directory” is a list of franchise brands that have been reviewed by the SBA and are eligible for SBA financial assistance.
Unfortunately, one of the downsides of this type of loan is the time it can take to get funding. The SBA Franchise Directory makes it easier for lenders who are then able to use this list to determine a brand’s eligibility, rather than having to review franchise agreements and other documentation.
About Wayback Burgers
Becoming a franchisee, especially with a growing brand in the thriving QSR sector like Wayback Burgers, is an excellent way to build your own business while building on the brand’s proven successes.
If you are a first-time business owner looking for guidance, systems, and support, or a seasoned entrepreneur looking for your next investment opportunity, check out Wayback Burgers.
Wayback Burgers offers qualified candidates the opportunity to open and operate a business in the highly sought-after fast-casual sector with a small footprint and a big upside.
Currently operating 166 locations in 30 states and seven countries, the Connecticut-based burger franchise increased its system size by 14 percent in 2018 and is projecting similar growth for 2019. Wayback offers initial training and ongoing support for all its franchisees and works diligently on finding innovative ways to offer franchisees the opportunity to increase revenue while adding value to the customer experience.