Becoming a master franchisee could hold the key to rapid business growth and high income potential. But running a franchise network as opposed to a single unit takes significantly more preparation and commitment. So, we’ve created a five-year plan for those looking to make the leap.
How long does it take to become a master franchisee? It’s a common question, but one without a definite answer. Ultimately, the pace you take is down to you.
Five years should be enough time for you to become a master franchisee, from deciding you might like to take the career path to signing a contract. Here are the 12 key steps you’ll need to take as you work your way towards your next career goal.
How to become a master franchisee in five years
Five years to go…
1. Research the role
The first step in the process is to make sure you understand the role of a master franchisee inside out. So, what does a master franchisee do? Here’s a quick run-down of their main responsibilities:
- Interviewing, recruiting and training sub-franchisees
- Delivering ongoing support for sub-franchisees
- Developing marketing strategies and materials
- Sticking to the franchisor’s development schedule by opening new units by specified deadlines
- Monitoring franchise units to make sure they uphold the brand standards
- Staying in touch with the franchisor to provide feedback and discuss growth
2. Make sure you have the right skills
Running a franchise network across a given territory requires a different set of skills than the ones you’ll need to operate a single unit. Most franchises offer training schemes to make sure you understand their systems and branding, but you’ll need to have entrepreneurial and managerial experience if you’re to pass the application process.
Assess your strengths, and make sure you’re capable of handling business development and marketing responsibilities, as well as becoming a leader, mentor and manager. You can read more about the skills you need for becoming a master franchisee in our dedicated article.
If you don’t have the right attributes, now’s the time to get some experience, either in a managerial role or as a single-unit franchisee.
Three years to go…
3. Review your finances
At this point, you should start to think about how much you can afford to spend. You’ll probably pay a six- or seven-figure sum to become a master franchisee, but banks may be willing to lend up to 70 percent of your investment total. Start the conversation with lending partners to see how much you could feasibly borrow.
Don’t forget to account for the working capital you’ll need to survive until you recruit franchisees and help them launch their units and turn a profit.
4. Attend franchise events
Franchise exhibitions and networking events are fantastic opportunities to learn more about the franchise world and find the best investment openings. They take place across the UK, so you probably won’t have to travel far to reach your nearest one. Take the time to mingle with business owners and talk to franchisees about their experiences.
>> Read more:
5. Choose an industry
If you didn’t already know which industry you’d like to join, attending franchise events should have given you a better idea. Think about whether you’re drawn to any sectors in particular, and whether you have a passion for a certain area of business. Which industries would give you the opportunity to put your skills to good use?
Remember, you can always hire accountants and legal professionals to help you tackle the more complicated aspects of running your own business. So, focus on finding a sector where you can harness your passion to nurture commercial growth.
Two years to go…
6. Find franchises to suit your skills, interests and budget
It’s time to start narrowing down your choices. Combine your findings from franchise events, internet research and online directories like Point Franchise to pick out the best opportunities.
If you use franchise consultants to help you find your ideal brand, be aware of their priorities. Often, they’re paid by franchisors to encourage entrepreneurs to invest in their business, so they may not always have your best interests in mind.
7. Do your due diligence
Here comes the most time-consuming aspect of becoming a master franchisee. It may be tedious, but you must make sure you understand your future obligations as an investor inside out. Fail to do your research before you sign up, and you could get a nasty surprise further down the line.
Scrutinise the franchise disclosure document (FDD) and conduct wider research across areas including:
- The franchise’s business model
- Any key market differences between the franchise’s home country or region, and your own territory, including regional laws and cultural nuances
- The franchise’s membership to any industry bodies, such as the British Franchise Association
- The proposed development schedule
- The proposed fee structure
- The potential costs of sub-franchisee recruitment, training and support
- The franchise’s supply chain and potential pricing or procurement issues
- The reputation and track record of both the franchise brand and franchisor
8. Make sure your chosen franchise is right for you
A franchise may have a winning business model, but you won’t do very well if it’s not right for you. Think about whether the model aligns with your own values and whether you feel you could work well with the franchisor. Do you have a similar attitude and working style, for example?
9. Visit existing franchise locations and talk to franchisees
We recommend visiting some of the franchise’s locations in person to really get a feel for day-to-day life within the business. If possible, take a road trip and drop in on several branches to get a more comprehensive understanding of the brand.
If you’re not able to talk to any franchisees on your travels, ask the franchisor to put you in touch with some - but make sure they don’t cherry-pick high-performing investors. Ask them about their experiences and any challenges they’ve faced, as well as the lessons they’ve learned along the way.
>> Read more:
- 5 Advantages of Franchising for Young People
- 9 Things to Know Before Becoming a Franchisee
- Mythbusters: Common Misconceptions About What Makes a Successful Franchisee
- 5 Great Reasons to Become a Franchisee
- Franchising 101: Are You Ready to Become a Franchisee?
- Franchising 101: 6 Things to Know Before Becoming a Franchisee
One year to go…
10. Get professional advice
Accountants and lawyers with experience in the franchise industry will be able to review the franchise agreement with you and flag up any potential issues.
During your consultations, they should be able to corroborate your own research in areas like pricing structures and development schedules. Plus, they’ll go over the smallprint when it comes to your future responsibilities, contract breach penalties and exit procedures.
11. Prepare your business plan
Once you’re certain you’d like to proceed with a master franchise investment, the franchisor will help you build your business plan. Again, you could consult financial and legal professionals to make sure you get your numbers right.
12. Confirm and take out funding
The last step in the process of becoming a master franchisee is to confirm your funding arrangements with your chosen bank. Complete any last-minute tasks and checks before taking out the capital you’ll need to launch your business network.
Once you’ve got your funds and your business plan, you’re ready to sign on the dotted line!
Become a master franchisee
Point Franchise is dedicated to bringing you high-quality investment openings from across the UK. Take a look at our range of master franchise opportunities to get started today.
Alice Tuffery, Point Franchise ©