If you are reading this, chances are you are like many those with an entrepreneurial mindset who are exploring the benefits of buying and owning a home-based franchise business. From starting a family legacy business to having a more flexible work schedule and being your own boss, the popularity of owning a successful franchise business has helped tens of thousands realize their own unique slice of the “American dream”. And while there are several steps one must follow to successfully purchase a business franchise, perhaps none are more important than the franchise application. That’s because in reality, a franchise is “awarded” by the company (the Franchisor) to the buyer (the Franchisee). Throughout the review and application process, there is due diligence on both sides, criteria to fulfill, and more. In essence, you are creating a potential long-term business relationship, and the entire process, especially the franchise application, should be taken seriously. So, how do you do it and what should you expect? Before we get into the “how”, let’s take a quick look at the “what”.
What is a franchise application?
Once you’ve selected the franchise you want to purchase, filled out a request for more information, and in most cases, spoken with someone who represents the brand and works with prospective franchisees such as yourself, you will likely be asked to complete the brand’s franchise application. In many respects a franchise application is similar to a job application, or a shortened loan application. Also, it’s important to know that not all franchise applications are the same. However, one thing all franchise applications share is the objective to find out more in-depth information about yourself. Most franchise applications will 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 to provide some degree of personal financial information- such as cash on hand, estimated value of investments, retirement accounts, bankruptcies, etc.
Use the franchise application to set yourself apart from other franchise applicants.
Throughout the franchise application phase, you’ll want to impress the franchisor and stand out from those other applicants who are also clamoring to get approved for purchasing a franchise. Likely the most important part of the application will be the financial section. This is where the franchisor will be looking to confirm that you meet their financial requirements, so it’s essential you are prepared to share this information and be as transparent as possible. Assuming you are financially qualified, you can stand out from other franchise applicants by illustrating any successful prior or current business ownership, management or leadership experience you have, 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. They will want to know what kind of prospect you are- how interested and serious you are, and what your short- and long-term goals are. The company may also consider your personality and work ethic. In general, most franchisors value a self-starter who takes initiative but who is also willing to follow and operate in accordance with the brand’s best practices and guidelines.
You’ve completed the franchise application…now what?
Filling out the franchise application does not mean you have committed to signing a franchise agreement. Additionally, it does not guarantee the franchisor will award you with a franchise. Rather, the completed franchise application is merely one of the tools the franchisor uses to determine your overall suitability for their brand. What it does do is demonstrate your level of interest. Once you’ve completed and submitted the franchise application, it shows the franchisor you are a serious candidate and are prepared for the evaluation and discovery phase. If your application is accepted, you’ll be given the opportunity to move forward with additional steps in the process, which typically include what’s known as a “Discovery Day” and a review of the Franchise Disclosure Document (FDD). But remember, not all franchise discovery or evaluation processes are the same. In fact, some franchisors may request a business plan before signing a franchise agreement.
Covering initial investment/purchasing costs.
Most new franchisees may not have the financial resources to fund the entire initial franchise investment on their own. Even if they do, many turn to outside lending sources to provide their needed financing. This may include tapping into a 401K or retirement fund, or using traditional lending institutions such as local or national banks. Many franchise brands have built partnerships with lenders and can help you start evaluating your financial options before you sign a franchise agreement. For example, 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 SBA directory even includes a listing of those franchise brands that have been reviewed by the SBA and are eligible for SBA financial assistance.
See why now is the ideal time to explore the benefits of owning a home improvement franchise.
If you have a desire to succeed and are looking for greater control over your own earning potential, explore the exciting franchise opportunities of Home Franchise Concepts® (HFC). By partnering with HFC you are provided with the support and backing of a dynamic, successful company that is highly regarded, and one that’s consistently ranked on Fortune Magazine’s “100 best companies to work for” list. Home Franchise Concepts owns several of the leading brands within the growing home improvement industry, such as Concrete Craft®, AdvantaClean®, Budget Blinds®, Tailored Closet™, Kitchen Tune-Up®, and Bath Tune-Up®. Take control of your future and get educated about franchising by selecting a company that is best for you and your family’s future. Call us today at 800-420-5374 or go online to Home Franchise Concepts. One of our franchise licensing advisors will be happy to answer any questions you have and assist with evaluating whether franchise ownership is right for you and which of our brands is the best fit in the rapidly expanding home services and home improvement franchising category.