There are no legal requirements related to how long you must be in business prior to starting a franchise; in fact, sometimes franchise companies start without any prior operating experience at all.
The reason for having prior operations is that it gives the startup franchise credibility in the eyes of the potential franchise buyers. Whether you've been in business for three months or 10 years, prospects will want to know why they should invest with you and how safe they will be if they do so.
Question added to topic Franchises •
July 21, 2008
How long must you be in business to start a franchise?
I know that the last three years are supposed to be included in the UFOC, but what if you have been in business for a lesser amount of time?
Jeff Elgin has almost 20 years of experience franchising, both as a franchisee and a senior franchise company executive. He's currently the CEO of FranChoice Inc., a company that provides free consulting to consumers looking for a franchise that best meets their needs.
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