Owning a franchise can be an exciting journey, especially when it involves a product or service you feel passionate about. But before attaining the title of a franchisee, there are some qualifications that you will first need to meet. While some of the specifics, such as financial aspects, will be dependent on the franchise you are interested in, there are some general commonalities to consider.
Tip #1: Determine your net worth
Net worth, which is the value of all of your assets, plays a major role in whether you qualify to become a franchisee. A certain monetary amount will often be listed on the brochure or website of the franchise you are interested in (such as what we do here at Dogtopia), and it’s very important that you meet this qualification fully.
Before taking the steps to inquire about becoming a franchisee, we suggest that you confidently know this information, which may involve speaking with your financial advisor. As well, you will need to verify your net worth, so you will need to have this information on hand. Net worth is an important factor in owning a franchise, as there may be instances where you need to turn to those assets to give your franchise business some monetary momentum.
Tip #2: Ensure that you have enough liquid capital
Similar to net worth, liquid capital must also be verified before you can proceed. Liquid capital is the funds you have set aside that you can easily access, such as money that you have in the bank or on hand, and can put toward the franchise. It is important to note that liquid capital is not borrowed money (as that will often lead to future headaches) and that you can risk accessing it, while still having funds to spare.
The amount of liquid capital required will vary depending on the franchise, as there are certain requirements that liquid capital will go toward. This can include the initial franchise fee, various deposits for the franchise location itself, rent (if applicable), and more. Being able to pay for such requirements is crucial, so determining and verifying your liquid capital is an important aspect to qualifying as a franchisee.
Additionally, you will also receive a Franchise Disclosure Document (FDD) that will outline several aspects of the franchise system that you may enter. Within the FDD, the franchisor will typically calculate an approximate amount of expenses you will be required to pay when you become a franchise owner, and if your franchise is not profitable yet (which can take some time) you need to be able to have capital that you can access to cover these expenses, while still being able to support yourself personally.
This is why we strongly suggest waiting until you have funds available and that you are in a secure financial place before going into business, as it is those extra expenses (including ongoing royalty fees, initial investment, operational costs, and materials.) that can really impact your finances.
Tip #3: Be prepared if you require loans
If you require financing in order to cover some of the necessary franchising costs, you will need to seek out a lender and obtain a loan. Some franchises have financing available that you can access, otherwise, you will need to access it from a third party.
There are several steps involved to qualify for a loan, such as ensuring your credit score is in good standing and that you have a detailed business plan. A business plan can include many aspects, but it is important that it acts as a guide for the lender and that it provides insight into how the borrowed money can be repaid. One of the goals with a business plan is that you can offer reassurance to the lender that your franchise business will be profitable.
Tip #4: Determine your drive for franchising
Franchising offers many benefits, including ongoing support from the franchisor to assist with various aspects along the way. Running a business can be nerve-wracking, whether you own a start-up or are about to own a franchise, and there are going to be some common hurdles that you need to jump over. However, having that support, along with knowing that the business itself has a successful plan in place, can be really reassuring.
The franchisee does have to put in a significant amount of effort to make a franchise location successful and prosperous, and that requires a certain level of drive and passion. While there are various leadership qualities that a successful franchisee can display, drive and motivation are something that should be there from the beginning, even before inquiring about a franchise.
Coinciding with drive, you also need to consider if franchising is really for you. While there are many factors that contribute to its greatness, it can be a change of pace for those used to a more corporate environment or a role that is more routine in its day-to-day responsibilities. In franchising, every day can look different, you may need to put in more hours, and your work/life balance may vary (especially in the beginning). However, if you have the drive to make this business successful and the passion to bring this product or service-based franchise into your community, it will all be worth it.
Tip #5: Have some general franchising experience or related skills
While there may be some instances where a franchisee enters into a franchise agreement with absolutely no previous experience or related skills, it is always a good idea to try and lean toward franchises that you have some knowledge in, and most of all, an interest in. For example, if you have experience engaging with the public, looking for franchises that are public facing could be a good fit. Other skills often found in franchisees include experience managing a group of employees, the ability to delegate, and strong communication skills.
When determining if you qualify to become a franchisee, having this experience and/or skills can be really beneficial, especially since the franchisor wants to be confident the franchisee will be able to successfully represent their brand and handle everything that goes along with it. Additionally, having these skills and/or experience can help better prepare you if you do become an official franchise owner.
Franchise with Dogtopia
If you are interested in seeing if you qualify as a Dogtopia franchise owner, please check out our “What is my investment?” page that outlines some of the initial requirements you need to meet. You can also look through our FAQ page with detailed explanations to some of the most common questions we receive. If you meet these requirements and are interested in joining the Dogtopia family, please fill out our online inquiry form to get in contact with our franchising team.