Are you about to set up a franchise or are you planning a licensing partnership with an established franchisor, but have not yet decided on a suitable brand? Selecting the right franchise system and the entire pre-opening early phase will be critical in designing your future franchise business - it will determine the extent to which your franchise operation will benefit from the partnership in the future. Engel & Völkers has presented five steps that you should look out for in the run-up to your career as a franchisee in order to set all the right course at the right time.
If you want to start a franchise business, you should, as much as possible inform yourself on the subjects of franchising, self-employment, business and opportunities and risks. You should go over all legal, economic and organizational implications in order to initiate fact-based and well-informed start-ups. It is also very helpful to understand your own goals of your franchise career. Do you primarily want to benefit from professional independence? Are your intentions in maximizing your earnings? Or do you see the challenge in a high degree of operational responsibility? Depending on your personal goals, you can find franchisors who fulfill your ambitions and offer you corresponding opportunities.
Once the information base for your start-up investment has been created, you can start looking for the right franchisor. Always keep your goals in mind and systematically research suitable candidates for the franchise partnership. Above all else, the franchisor should serve your desired industry, offer you an advantageous service package, and, depending on your willingness to relocate, not demand too great a physical distance to the later license area. Do not try to disproportionately adapt to a licensee to meet its expansion criteria, but make your own preferences the deciding factor. Your long-term satisfaction as a franchisee depends on it.
If you have selected a narrower circle of potential franchisors, you should check their background. Under the pre-contractual information obligations, each franchisor must provide you with all information relevant to your license agreement decision, including, but not limited to, business success. Only partnering with a successful franchise system will be beneficial for your start-up, as you do not want to invest in a system but want to benefit from it. The success of a franchise system can be understood in terms of growth speed - read our article on identifying successful franchise systems for your licensing partnership.
The franchise agreement seals the partnership with the franchisee for a predetermined period. For this reason, you should have all the details of this complex document checked by a trained third party - ideally by a franchise specialist. The agreement governs every detail of the franchise partnership - from the level of licensing costs, mutual rights and obligations of the parties to exceptional situations such as expansion or disability. The legal review of the contract warns you against disproportionate clauses in favor of the franchisor and also ensures that you have not overlooked any important detail with the signing of the contract.
After the successfully concluded franchise agreement, the last step of the early stage of your franchise begins: Integration into the franchise system. At this stage, your business will receive the brand image of the franchisor in the style of their corporate identity. They adapt their product range, adopt the franchisor's marketing and sales strategies, and visit franchise-internal training sessions with your team to familiarize them with the franchise system workflow. With the ready and proven concept of the franchisor, regional and supraregional advertising behind the scenes and a promising future for the coming years, it is time to start your franchise operation.
Engel & Völkers offers real estate franchises at the highest level. At over 800 locations worldwide, we offer first-class franchisee support for our licensees. Are you interested in working as an independent real estate agent? We look forward to hearing from you, and we will gladly provide you with further information about our offer.
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