Much like there’s no specific timeline you have to stick to when opening your small business, there’s not a tight window of time you have to stick to when opening up a franchise location. There is plenty of information online to help you make the determination on becoming a franchisee. For starters, you need to make sure you’re okay with ceding a certain amount of control over your business, as is the nature with franchises.
Once you’ve made the decision to become a franchisee, create a shortlist of strong options and contact representatives from each one. They will send you a Franchise Disclosure Document (FDD) before or after what’s called a Discovery Day. During the Discovery Day, you’ll meet with company representatives, observe the day-to-day operations of a franchise, and ask questions with key personnel. Depending on a few factors, you could get a Discovery Day set up in a matter of weeks or even days.
Regardless of when you receive the FDD, you are allowed a minimum of 14 days to review the document and sign. The franchisor you meet with at a Discovery Day will likely give you a soft deadline to decide whether or not you want to move forward with opening a location. That window is often between two weeks and a couple of months. During that time, you should have an attorney look over the FDD so you’re aware of any potential issues or terms that don’t necessarily align with your entrepreneurial goals.
As soon as you get information about the funding you need, start thinking about potential sources. Many franchisors offer in-house loans for certain franchisees. Apart from your franchisor, you should research your options with state and federal programs. The Small Business Administration (SBA) often gives potential franchisees chances to apply for loans. If nothing else, private loans are always an option.
After You Sign the FDD
The time it takes to get your franchise up and running after singing all the documents and securing funding could be between two months and a year. Franchises with no brick-and-mortar locations often launch within weeks. However, it will take some time to build a new location for, say, Dunkin’ Donuts or Arby’s. Overall, the entire process from contacting a potential franchisor to launching your franchise location is likely to last between 6 and 12 months.
Trembly Law Firm is Here to Help Get You Started
Starting a franchise is a different animal than starting your own business. You will have a unique relationship with the franchisor and enjoy a fair amount of institutional support. In exchange for this support, you give up a certain amount of autonomy.
Whatever your goals, our firm would be honored to look over any business contracts you are considering. Reach out to our team today to schedule a consultation.