Pre-selection of franchise systems

The following questions will help you make the findings included in the selection.

  • What is this business concept, which can bring the greatest interest?
  • Which of these franchise concepts fit into my financial plan?
  • Which business idea there on my wish-site the best chance of success
  • Is there possibly a franchise for which you easily can get a financial support?

Individual franchisor contact

Then you can proceed to the next step, namely, to contact their prospective franchisor directly. If you have followed the above-mentioned steps carefully planning, you should now have a very clear picture. Please request of any franchise system that you pull at that point your research on the shortlist, to information that is more detailed.

The first contact with your potential franchisors, there are three options. First, you can use the Internet use to the respective franchise system to find detailed information on each franchise concepts.

The information will be forwarded directly to the contact person. He then in a short time with the prospective franchisee has cooperation relationship. The advantage of this approach is that you can, without extensive search, relatively quickly at the right contact person can get in touch. A second, more personal way is the visit to a trade fair for start-ups. The third, still a relatively new way of contacting the so-called franchise 1:1 business meetings. Here the franchisee is given the opportunity to get into pre-booked 30-minute briefings important information about that concept of personal representatives of franchise companies. This relatively new idea of the presentation has the advantage that in addition to the possibility of obtaining technical information, a certain aspect of the design approach can be demonstrated. Therefore, you can possibly also equal “assess” his future business partner.

Individual conversations with franchisors whose concepts are into question

Ideally, by this time a decision in favour of one (maximum of 2) business concepts. In further individual discussions between you and the franchisor, it is now a matter contractual detail to clarify and establish ground rules for future cooperation. At this point, you should by no means forget to ask your franchisor how much “freedom” is given to them as a business owner in the daily management. This manoeuvre may be designed differently from concept to concept. Find out at this point so be sure how much is from the central office decided “over your head” and which elements of the management to have a say.

Franchise – Successfully Autonomously Steps

This article is designed to inform you about what you need to deal in regards to individual steps to successful business:

Pre-selection meeting

Franchisor also have a strong interest in long-term bonds with your franchisees. Therefore, it is essential that the franchisee in advance is good to have a clear picture of what type of business they want to run as a self-employed.

The range of franchise concepts is very diverse. Here are selection criteria, which it should be also taken into consideration:

  • Their previous professional activities and experiences
  • Financial freedom and necessary expenses
  • Ongoing costs of management

Own financial leeway explore

A solid financial plan is also a very important franchise establishment. Therefore, it is recommended as early as possible to get an overview of its own financial resources. With this information, you can narrow the eligible franchise systems and which are closer to the focus of your search to franchise concepts.

Search for external funding opportunities

Bank makes a real conversation but only after the preparation of a meaningful business plan sense, but it is still advisable to seek early to find about the various options (up assistance, venture capital, business angels, etc.). This allows you, for example, to find out what requirements you must meet in order to qualify for start-up loans. You should also find out whether and how the individual up assistance time limits or other exclusions exist. The sooner you more detail on this, the faster and more efficient, you can run through your company formation. Make sure above all, your corporate financing is on a sound basis (if possible on multiple columns).

Target market and competition analysis

Not every franchise concept is necessarily suitable for any location. Thus, for example, from a business perspective makes no sense to open in the main shopping street, your street, the third tanning salon or the fifth quick-service restaurant. On the other hand, the reputable franchisor may assist in finding a suitable location for your franchise business.

Franchise finance properly

Here are some ways of which can be implemented to fund a start-up project.

Basis of any corporate finance always is a well-developed financial plan.

It is composed of the following individual components:

  • Profit and loss account (P & L)
  • Liquidity account
  • Calculation of capital requirements
  • Profitability planning

Each financing projects, as you can read on the site franchisingaccessoridonna, whether in the private or professional environment, should cover several “sources of funds“. Thereby the risk of a thin ceiling financial (especially in the initial phase) is reduced. For franchisees, there is now fortunately a variety of different franchise concepts to choose from.

About half (45%) of franchise systems in Germany, for example, have a minimum investment of less than € 50,000.
5% of the offered business concepts cannot have their own capital to start, for the remaining 50% is required from 50,000 to 650,000 € (Source: German Franchise Association).Many franchisees support their new partners in the drafting of a meaningful business plan. This basic strategy document serves as a basis (for banks even as a prerequisite) for any financing negotiations. Here can help the experience and expertise of the franchisor.

Through the experience of established business, units in the franchise system in terms of the expected revenues and profitability of the enterprise can be made much more accurate predictions, than with a conventional foundation. It is also recommended to conduct parallel negotiations with several potential sponsors. To get an overview of the anticipated costs and can choose the most advantageous deals. Setting up a business should always be allocated based on multiple sources of money.

Here is a viable financial plan model:

Equity Financing

The first column of the figure above, the shareholders’ equity, with the most important pillars of a corporate financing represents the more capital you can muster from “his own pocket,” the less you have to borrow to start his own business. However, since very few people to be able to invest substantial sums of money from the bank account, can be instrumental in finding the right franchise concept is an accurate price comparison pay as well as a targeted search for a franchise concept with a reasonable initial investment. The actual calculation of the available equity is relatively straightforward and always runs according to the following scheme.

Determination of shareholders’ equity:

Step 1: determination of financial assets as the sum of the available funds in various accounts

Step 2: Calculation of the existing debt as the sum of the outstanding payment amounts for various financial burdens (e.g., mortgage, savings loans, overdrafts, etc.)

Step 3: Calculation of the available equity: