What You Need to Know Before Starting a Real Estate Franchise

According to the National Association of Realtors, in 2007 almost 45 percent of its members belonged to real estate franchise companies. Of these members of these real estate franchise companies, 80 percent claimed that their affiliation with a real estate franchise made them more readily able to acquire listings. Almost 90 percent of the members of the real estate franchise companies believed that being affiliated with a real estate franchise improved the brand name recognition of the real estate franchise.

Some of the advantages conferred upon a small, independent real estate company by joining a real estate franchise include benefitting from the proven track record of success associated with the larger franchise companies, brand name recognition of the real estate franchise, training and operational support provided by the real estate franchise companies, marketing and advertising support conferred from the franchise companies to the smaller real estate franchise branches, the ability to negotiate better prices from vendors due to the ability to negotiate as a larger group, partnerships to gain better and more affordable access to related vendors such as home inspectors or mortgage lenders, and decreased risk to to being enrolled in larger real estate franchise companies.

What You Need to Know Before Starting a Retail Franchise

Retail franchises are one of the most common types of franchises that a person will encounter. A retail franchise may be a free standing business or it may be located in a larger retail environment, such as a shopping mall. No matter where the retail franchise is located, a retail franchise opportunity can allow an individual to derive many benefits from the retail franchise relationship.

Although retail franchises may place some limitations on a business owner that would not be experienced by an individual who started their own independent business, a retail franchise also confers a number of protective advantages that may not be experienced by an independent business owner.

A retail franchise opportunity can be found in almost any retail field. Retail franchises can fulfill the goals of all but the most cutting edge retail fields. Even so, retail franchises for these cutting edge fields often develop before very long.

A retail franchise should allow the business owner the opportunity to run their own business, but will usually remove some of the risk that is associated with starting a business because a retail franchise usually provides the brand recognition and marketing opportunity that presents some of the larger hurdles to individuals who seek to establish their own businesses.

How to Buy a Franchise

Once an individual has decided to buy a franchise, he/she must understand the process involved in purchasing a franchise. Before buying a franchise, an individual must determine what type of franchise he/she is interested in. Certain types of franchises will suit certain types of people. There are more than 70 franchise categories, and therefore, an individual will be able to locate a franchise that suits his/her interests.

It is important that an individual dedicate the time necessary to locating a type of franchise that he/she is happy with as he/she will be required to make a large investment in this franchise. An individual can review a franchise directory to find available opportunities within his/her desired category. Once an individual decides what franchise he/she wishes to purchase, he/she can request additional information about the company and the franchise specifications.

Once an individual has reviewed the information provided by the franchiser, he/she should conduct additional research about the company and determine whether or not it is a lasting investment. An individual should meet with a company representative in order to discuss the responsibilities and expectations associated with franchising on the part of both the franchiser and the franchisee.

If an individual still wishes to buy a franchise, he/she must obtain a franchise loan from a bank or lender. Once the necessary funds are obtained to cover the investment cost, an individual will be provided with a franchise agreement, which he/she must sign.

Following a franchise sale, an individual must take all of the steps necessary to operate the store successfully. This includes hiring and training a manager and employees. This is a general guideline for individuals who are considering buying a franchise. However, more detailed information should be reviewed before initiating this process.

How to Develop a Franchise

If an individual has established a successful business, he/she may
want to spread his/her business through franchise development. Franchising a
business is an extensive and grueling process. It can take many years for an
individual to create a successful franchise. A business owner should not expect
to obtain a return on his/her investment within a matter of months, as it can
take a number of years for any notable return to occur.

The first step to franchising a business is establishing a number
of companies with owned and operated stores. If these stores are successful and
the procedures used within these stores are effective, the franchise is more
likely to be successful. Utilizing these stores as models, a business owner
should develop a detailed operations manual and training program.

In order for an individual to develop a franchise, he/she must
create a Franchise Agreement and a Franchise Disclosure Document. Both of these
legal documents are essential to ensuring that the franchise operates
appropriately. An individual should consider hiring a franchise lawyer, who can
help him/her complete and create all necessary documents. He/she should also
trademark a brand name so that he/she has control over the company’s name.

Another important feature of franchise development is marketing
and advertising the available franchise opportunities. In order for a franchise
to be successful, a franchiser must locate potential franchisees to invest in
the franchise.

This is a brief overview of some of the steps involved in franchising
a business. However, this process is detailed and extensive, and therefore, it
is important for an individual to fully understand all aspects of this
process.