Business & News

How To Start A Franchise Business

Jun 16, 2023

How To Start A Franchise Business

Starting a franchise restaurant can require just as much effort as starting your very own restaurant. A successful franchise business makes for an attractive option as it is a model that operates on set operations guidelines, training procedures, menu and so on. However, franchisees would have to pay a portion of their profits to the franchisor. 

Here’s the quick breakdown of the pros and cons when starting a franchise business. 


  • Access to existing, trusted vendors

  • Built-in brand awareness and customer base

  • Logo, branding, and style already set 


  • Higher start-ups costs

  • Less freedom to innovate

  • Abide to set guidelines and standards 

The processes of starting a franchise business may differ from countries to countries, but here is a rough guide of starting a franchise in 8 steps. 

  1. Research

Take your time to research and find franchise opportunities. When picking a franchise opportunity, these are the key points to keep in mind: 

  • Industry fees

  • Liquid capital 

  • Average monthly/yearly

  • Royalty fees

  • Marketing fees

  • Other fees

Evaluate opportunities 

Before starting a franchise business, it’s best to ensure that one doesn’t already exist in the area. You would want to make sure that you’re not setting up a competitive location that could underperform. 

Evaluate costs

In addition to regular business costs such as rent and maintenance, you need to factor in a yearly royalty to the franchisor. Other costs include travel costs 

Draft a business plan 

When making a business plan, you need to outline why you would be a strong steward of the business. Ultimately, you would want to explain how well you would be the best person to understand the community you wish to serve with your location. 

Get the franchise license agreement 

Before signing the license agreement, make sure to review it carefully and understand all the terms stated in the contract. 

Form a business entity 

The next step is setting up a corporation or business license for your restaurant.  

Choose your location 

It’s time to finalise on the location of the restaurant. There could be certain requirements that your restaurant needed to fulfil.  

Hire employees

Now you can start looking for employees. Franchise owners might have an internal job posting system, in case there are employees at other franchise locations looking to relocate.