The 7 Steps of Buying a Franchise: From Enquiry to Opening

Step 1: The Initial Enquiry

Every franchise journey begins with curiosity. Potential franchisees reach out to explore opportunities, often driven by a desire for financial independence or a passion for a particular industry. This stage is about asking the right questions:

• What industries excite me?
• What level of investment am I comfortable with?
• Do the operating hours suit my lifestyle?

The enquiry stage sets the tone for the relationship, ensuring that both franchisor and franchisee are aligned from the start.

Step 2: Research & Evaluation

Once interest is established, the next step is deep research. Franchise acquisition isn’t just about choosing a brand—it’s about evaluating its credibility, market potential, and support systems. Key considerations include:

• Brand reputation and customer loyalty
• Financial performance and Return on Investment (ROI) potential
• Training and operational support offered
• Compatibility with personal goals and lifestyle

Step 3: Building Trust & Capability

Franchising is a partnership. Beyond financial investment, franchisors look for franchisees who embody their values and can uphold brand standards. This stage often involves:

• Discovery days or interviews with franchisors
• Reviewing franchise information documents
• Assessing personal skills and readiness

Trust and capability are the foundation of a successful franchise relationship. Once a franchisee completes the franchisor’s assessment process, the franchisor will decide whether to approve the franchisee. This approval is conditional on securing a site and obtaining the necessary finance to establish the franchise.

 Step 4: Obtaining finance and securing a site

Franchisees may approach a commercial bank to finance 50% of the establishment cost. Securing finance depends on the franchisee’s financial health and ability to contribute at least 50% of the investment in unencumbered funds or cash.

The franchisor has the right to approve the selected site. It should meet all the franchisor’s requirements, whether it’s access to parking or being within the prescribed size range. This is a critical component of franchise success, especially in a retail environment. The franchisor should do market research or apply clear site criteria.

 Step 5: Agreements & Legal Procedures

Only after mutual trust is established do the legal processes begin. Should the franchisor approve you in principle, they will issue the franchise agreement and the Disclosure Document for your review. According to the Consumer Protection Act (CPA), the franchisee should have at least 14 days to review these documents before signing anything. After signing the franchise agreement, a franchisee may still cancel the agreement within the 10-day cooling-off period required by the CPA.

Step 6: Training & Support

Franchisors provide comprehensive training to ensure franchisees are equipped to run their business successfully. This includes:

• Operational training
• Marketing and sales strategies
• Technology and systems on-boarding
• Ongoing mentorship and support

Step 7: The Grand Opening

Finally, the journey culminates in the launch. With training complete, systems in place, and support structures ready, franchisees open their doors to the public. This milestone is not just about celebration—it’s the beginning of a long-term partnership and growth journey.

Conclusion

Buying a franchise is more than a transaction—it’s a structured journey of discovery, trust, and empowerment. Knowing what the journey entails helps franchisees to understand what to expect at every stage.