Whether you work in the movie business, use movies to entertain business clients or support charities through ticket purchases, it is very likely you can claim movie tickets as a business expense, even if there is no tax on movie tickets. Since movies are widely viewed as a form of personal entertainment, it is imperative to be thorough with your record-keeping to support your claims. Make sure you are claiming movie tickets for the right reasons to pass inspection when you file
The IRS allows for business deductions that are considered ordinary and necessary for your type of business. This means it may be possible for you to deduct those movie tickets come tax time.
Business Expenses Defined
A business expense is a cost that is incurred while a business is operating. This could mean the amount spent on advertising to new customers, or money spent on potential clients to attempt to gain their business. If movie tickets are part of the cost of doing business, then at least a portion of the expense can be claimed as a business expense. But how the tickets and used and the reason for them comes into play.
When entertaining a client for business reasons, from rounds of golf to movie tickets, you can deduct half your entertainment expenses. However, there are a few things you should do to support your deduction claim so you do not run afoul of the IRS. Keep timely track of your entertainment expenses. Keep a journal, diary or calendar updated with the following information: who was present, where the theater is located, when it happened, why the meeting was important and how much it cost. If you do not record this information immediately, you may not be able to deduct the movie tickets. Any expense over $75 requires keeping a receipt.
General Work-Related Education
Expenses you incur to maintain or improve your skills for your job are deductible, according to the IRS. That means if you are a history teacher, tickets for a documentary movie with new, related information about a historical event is deductible because you are watching it to maintain or improve your professional knowledge. However, education expenses for a new job are not deductible. The movie has to be related to your current job for you to claim it. Keep detailed records concerning the time, place and importance of the film to support your claim.
If your movie tickets are part of a charitable donation, you may be able to claim a deduction. The fine print on this example is that you can deduct only what you spend beyond the fair market price of the ticket. For instance, if at a fundraiser you purchase movie tickets for $100 that would typically cost $30, your charitable contribution is $70. That $70 is deductible. Benefits for film-funding charities sometimes offer overpriced tickets to a screening to raise money for students and grants. If you support an institution in this manner, the amount you spend that is over the fair market value of the entertainment you receive is considered a deductible expense.
Film Industry Professionals
Simply because you work in movies doesn’t mean that every movie you see will be considered a business expense by the IRS. In fact, if you attempt to deduct every movie you see, that will raise a red flag. The most important element of claiming movie tickets as a business expense as a film professional or claiming tax deductions for entertainment industry professionals is keeping thorough records and receipts that explain the business need to see each film. Whether you are an actor, technician, writer, director or producer, make claiming a movie ticket easier on yourself by keeping the receipt and the ticket stapled together, along with an explanation of why this particular film was a business requirement.
The worst thing about Cars 2, even worse than the fact that it is 106 minutes of Larry the Cable Guy doing his unfunny Larry the Cable Guy shtick against a backdrop of borderline offensive clichés and regional stereotypes, is that the animation is frequently dazzling. It’s flashy, colorful, full of intricate and eye-pleasing detail, and far, far lovelier than this terrible movie deserves.
The first Cars movie was a tired story about a cocky race car who needs to learn humility from a bunch of small-town yokels, but it still managed to deliver at least some charm and character variety. In contrast, Cars 2 puts all of its energy into a bafflingly insipid mistaken-identity spy plot, entirely centered on Larry the Cable Guy, a.k.a. Mater. It’s North by Northwestby Hee-Haw, and no matter how hard you wish for it, there is no reprieve; Larry the Cable Guy keeps being in the movie, and the movie keeps happening, and the movie is 106 minutes long.
Here is a list of other movies that are 106 minutes long: Hitchcock’s To Catch a Thief,Gremlins,D2: The Mighty Ducks,Whiplash,Fright Night,Lars and the Real Girl,Something’s Gotta Give,The Lego Movie 2,Halloween (2018). None of them contain uncomfortably long bidet gags, or references to “pains in my undercarriage,” or a scene where Larry the Cable Guy’s talking tow truck character pees himself in public. This makes them all five-star movies by comparison; highly recommended. —Aja Romano
20. Cars 3 (2017)
For a movie that largely exists to allow Disney’s merchandising arm to create more toys, Cars 3is better than it has to be. Like the other Cars movies, its world-building feels especially half-assed (unless you assume it’s the post-apocalyptic tale of a world where sentient cars have killed all humans). But unlike the first two movies, it’s a surprisingly involved story about aging, the dismantling of white male privilege, and our coming artificial intelligence-dominated future.
Befitting its characters, Cars 3 feels more assembled than gracefully created, and its distinctly episodic nature holds it back. But it’s the rare movie whose protagonist learns that winning at all costs isn’t the only thing. Consider it the computer-animated version of a classic sports film like Bull Durham. —Emily VanDerWerff
19. The Good Dinosaur (2015)
Even now, four years after its release, The Good Dinosaur can make a claim to being the most beautiful Pixar movie. Its photorealistic backdrops provide a gorgeous canvas for a story of a talking dinosaur and a silent human child trying to make their way across the American West to the dinosaur’s home.
The problem stems from how obvious it is that the story is cobbled together from the elements of other, better stories. Pixar made its name by taking wild scenarios that could only happen in animation — toys wake up, bugs have a secret society, there are monsters in the closet, etc. — and grounding them in old-fashioned, classic Hollywood storytelling. But The Good Dinosaur (which went through a tumultuous production process) doesn’t have much to add to the old tropes it’s updating. —EV
18. Cars (2006)
My 2-year-old nephew’s favorite movie — before he saw Toy Story, that is — was Cars. But then he saw Toy Story and he stopped talking about Cars (to my brother’s chagrin, since my brother loves cars, and Cars). I have to side with my nephew on this one. Cars is an absolutely fine movie, and it has a sweet affection for small-town, forgotten life by way of Radiator Springs. But Cars fails to match the ambition of some of its Pixar cousins, instead coming across as relaxed to the point of low stakes. And once you’ve seen any one of the studio’s other films, your love for Cars will most likely become but a passing phase. —Alex Abad-Santos
17) Finding Dory (2016)
Over the years, Pixar — or more specifically director-screenwriter Andrew Stanton — has perfected the basic studio sequel formula of repeating the previous movie’s plot without making it feel like more of the same. Prime example: Finding Dory doesn’t have much to add to the original story of Finding Nemo, but it does have the great reveal that Dory really cantalk to whales! Yes, that’s a small way to move things forward, but a fun one nonetheless.
The themes at the heart of Finding Nemo are still present in this film; there’s still an emphasis on the importance of found family, the unique challenges and delights of navigating life with a neuroatypical brain, and the vast and stunning splendor of the ocean. But Finding Dory diminishes Nemo’s philosophy of perseverance and communal kindness a bit, drowned out by a plot whose daring rescues frequently verge into the extravagant and often undermine the urgency of Dory’s quest to find her parents. That said, it’s still a fun kids’ movie, it’s still Pixar, and wow, the ocean: pretty cool, huh? —AR
16. A Bug’s Life (1998)
A Bug’s Life is something of a sophomore slump for Pixar. The studio’s follow-up to Toy Storywas one of two animated movies about insects to hit theaters within months of each other, dampening some of the excitement around it. (The movie’s competitor, Dreamworks’ Antz,came out first.) That was a strange move on both studios’ parts: Ants and grasshoppers aren’t the most endearing or marketable main characters. But few (if any) of the characters from A Bug’s Life are likely to rank among Pixar fans’ favorites.
The film culls from an old Aesop fable, The Ant and the Grasshopper, to tell a story that feels much folkier than Pixar’s more modern fare: Flik is an inventor who wants to help save his home from invading grasshoppers in an effort to prove his worth to his suspicious neighbors. Instead of recruiting real fighters, he collects a traveling circus group of other bugs and tries to pass them off as the saviors his fellow ants are looking for … an amusing premise, but ultimately not one that really sticks.
There’s still some value in watching A Bug’s Life, if only just to see how much Pixar’s animation and storytelling have evolved in the years since. And the movie does have some unique touches, like an explicitly romantic ending and a villain, the terrifying Hopper, that straight-up dies. Otherwise, A Bug’s Life is but a quirky footnote in Pixar’s catalog. —Allegra Frank
15. Monsters University (2013)
One of Pixar’s lesser follow-ups is this college-set prequel, which fails to leave as much of an impression as the film it’s based on. Mike Wazowski and his future BFF James P. “Sulley” Sullivan are college freshmen who, as we know from Monsters, Inc., are about to become lifelong pals. The stakes are low as a result, and in the end, it’s not all that interesting or exciting to watch their friendship develop. The college setting doesn’t really expand on the world of Monsters Inc., and watching these characters flail as their younger selves hardly adds to a story already defined best by its humor.
To the movie’s credit, there is a nice theme of learning to make peace with yourself when you fall short of achieving your dreams. Mike wants to be an accomplished scarer of humans, just like Sulley is — and again, we already know that isn’t to be. But when he realizes it’s not quite in the cards for him, he chases another passion instead. It’s not necessarily the most uplifting message from Pixar, but it plays out nicely (and realistically) enough. —AF
14. Brave (2012)
It felt, and in a way still feels, like so much was riding on Brave: It was Pixar’s first female-driven film, the first film with a girl as the hero, the first film with a woman as director. But Brenda Chapman, presiding over a depressinglygender-imbalanced art production team, found herself abruptly replaced in the director’s chair, on the orders of a CEO who later resignedfrom Pixar following allegations of sexual misconduct and accusations of “open sexism” that referenced Chapman’s firing.
Did Brave manage, then, to live up to expectations despite that production hurdle? I vote yes: Brave, by Pixar standards of excellence, is a delight. You feel the lovingly detailed animation in every curl on Princess Merida’s head, in every stitch of each intricate wall tapestry. Its story, about a fiery Scottish lass whose desire to fight and hunt like her father inadvertently leads her mother to be cursed and transfigured into a bear, is as interesting as the studio’s best. Its stakes — the restoration of Merida’s family and, oh, just her lifelong happiness and ability to be treated with respect in a violently patriarchal society — are as high as ever.
The plot isn’t as tightly wound as those of other, more highly regarded Pixar films, but that’s just fine. Brave takes its time reinforcing its emotional connections, lingering on the bond between Merida and her mom, and building Merida into one of Pixar’s most fully realized characters. Brave did everything the boys’ movies did, and it did it backward, in high heels, while frequently fending off inappropriate workplace behavior. If you want a better movie, well, here’s what you can do. —AR
13. Monsters Inc. (2001)
Remember how Monsters Inc. lost the first-ever Oscar for Best Animated Feature to Shrek? Awards aren’t everything — not to mention they’re both political and subjective — but the loss still feels like a sore spot in Pixar’s history. Unlike the movie that took the crown that year,Monsters Inc. holds up as something like an even more intimate Toy Story. It’s in part a platonic love story between an odd couple of monsters, the one-eyed Mike Wazowski and furry blue Sulley. Throw in a human toddler nicknamed Boo, who ends up in the guys’ care after getting lost in the monster world, and things get a bit more special.
Boo, Mike, and Sulley’s makeshift family is where Monsters Inc. wrings out its most emotional moments, even if it may be easy to cynically consider her a human plot device meant to inspire coos from viewers and create drama between her two fumbling monster dads. But Monsters Inc. is charming, funny, and often moving nonetheless.
In contrast to the more meme-friendly Shrek,Monsters Inc. doesn’t have an extensive internet legacy. And maybe that has clouded somefolks’ memory of its quality — there’s nothing like Shrek’s “All Star” sequence. (A high-energy musical number from Billy Crystal’s Mike comes really close, though.) But there’s a reason Pixar revisited the film with a (much less engrossing) prequel: Mike and Sulley are as classic a pair of best friends as Buzz Lightyear and Woody. It just may be harder to remember it because there’s no goofy alt-rock song attached. —AF
12. Incredibles 2 (2018)
It took 14 years for director Brad Bird to return to the world of 2004’s The Incredibles (one of Pixar’s finest films), and in that time, the world had gone absolutely gaga for superheroes. So this sequel engages with questions of what we’re looking for from superhero storytelling and from our current superhero boom.
But it’s also interested in a whole host of other questions, like what it means to be exceptional and how to balance the needs of the self against the needs of the community. That it wraps all this up in a zippy plot filled with brilliant action sequences and is centered on Holly Hunter’s Helen Parr (a.k.a. Elastigirl) gives the movie plenty of visual and storytelling verve. It’s messier than the first film, and at times, it’s hard to parse exactly what its villain’s motivations are. But that pales in comparison to all the stuff that works, because it works so, so well. —EV
11. Toy Story 4 (2019)
If Toy Story 4 is the end of the 24-year-old Toy Story franchise, it will be a satisfying one. While its predecessors are more ensemble-focused, this movie is really about Woody, the pull-string cowboy, as he comes to terms with his own obsolescence. Bonnie, who inherits Woody at the end of Toy Story 3, doesn’t love him as much as his original owner, Andy — leaving Woody to look for meaning in a life that doesn’t match up with the way he’s always believed it was supposed to go. Woven into the plot are vulnerable moments about how we deal with love, our feelings, and relationships that fall off with age.
Toy Story 4’s message to viewers is that we don’t have to stop loving someone just because they’re not in our lives anymore. And even if those relationships end, it doesn’t make them any less special or powerful.While one could argue these themes were already explored in the second and third Toy Story movies, Toy Story 4 still stands out with its rich storytelling and focused story. —AAS
10. Inside Out (2015)
When it was released in 2015, on the heels of a rough patch for Pixar (from when 2011’s Cars 2became the only Pixar movie with a rotten score on Rotten Tomatoes to when The Good Dinosaur had to abandon a late 2014 release date due to production problems), Inside Out felt like the studio finally righting its way. Its depiction of the emotions guiding the inner life of a girl on the cusp of adolescence was clever and visually innovative, while its cast (including Amy Poehler, Mindy Kaling, and Bill Hader) was perfectly chosen.\
The movie’s superb storytelling introduces incredibly complex ideas — like the notion that two emotions can combine into some third emotion, more complicated than either of them alone — in ways that make instant sense to the audience without tons of exposition. And the message that sometimes feeling darker emotions like sadness and anger is necessary is a meaningful one. Inside Out has its problems (particularly its perhaps too simplistic view of the divide between men and women), but on the whole, it’s a sneakily devastating good time. —EV
9. Toy Story 3 (2010)
Toy Story 3 is a heartbreaker. It’s the perfect culmination of a story that, when it came out in 2010, had been 15 years in the making. Andy, the kid who owned the franchise’s familiar ensemble of toys, grew up and out of his once-beloved playthings. As viewers, maybe his choice to ditch his toys as he preps for college feels unfair, even cruel. We love Woody and Buzz, after all — doesn’t Andy remember that he once did, too?
Of course he does. But as he enters a new phase of life to be filled with new people, new memories, new loves, his toys must accommodate him. And they have to come to terms with their own growth too; as new residents of Sunnyside Daycare, they’re about to meet new kids and learn to love them, as scary as that can seem.
As a viewer around Andy’s age when Toy Story 3came out, I found the film beautiful, if very difficult to watch. Yes, it’s beautiful and emotional at any age (there’s a scene toward the end with an incinerator that should be used as a sociopathy test, because if you don’t cry, there’s an issue). But watching it as I sat on the cusp of college myself, I found it to be the most affecting, realistic portrait of the transition to adulthood I’d ever seen in animation. This was the dramatic, necessary conclusion that Pixar had been building toward since the first Toy Story. All apologies to Toy Story 4, but Toy Story 3 will always feel like the series’ true finale. —AF
8. Coco (2017)
Coco doesn’t get enough credit for being one of the most beautiful films of Pixar’s entire run — if not the past 25 years overall. That first glimpse of the soaring, stupendous, and sweetly spooky Land of the Dead is breathtaking. But a failure to fully recognize Coco’s beauty could be blamed on how wonderfully Coco tells a story about how crucial our families are to who we become.
Miguel, the movie’s plucky protagonist, travels to the underworld to find out about himself and his family’s history, but ends up finally understanding his grandmother and, for the first time, truly discovers who she is. Through the journey, he realizes that love is the only way for him, and for those who have died, to forever remain in the world of the living — at least in spirit. In Coco’s world, and in ours too, love, life, and survival are one and the same. —AAS
7. Toy Story 2 (1999)
Toy Story 2’s magic lies in its ability to add world-shattering wrinkles into the fabric of everything we thought we knew about Toy Story. In this installment, Woody’s going through an existential crisis, as he has to choose between leaving Andy to “live” (a loose interpretation of the word) in a Japanese museum forever or staying with Andy, despite Woody’s fears that Andy will outgrow him. The narrative twists and trapdoors in making Woody more cognizant of his own existence, and his wants and desires, are equal parts stress-inducing and thought-provoking for those of us who have grown attached to the pull-string cowboy. The creativity, adventure and emotional depth in Toy Story 2 make it, in the eyes of some viewers, the bestToy Story of all time. [Ed. note:Our collective ranking suggests otherwise, but it’s all subjective, right?] —AAS
6. Up (2009)
One of my favorite things about Up is the delighted conversation my friends had upon its release about Kevin the Bird. Granted, there are lots of reasons to love Up: It’s masterful at wrangling its openly bittersweet emotions, particularly showcased in Pixar’s best and most memorable opening montage. It’s dotted with faint touches of magical realism that befit its South American locale, and many of them are warmhearted surprises: Balloon-ship houses! Dogs that can tell you they love you! “Squirrel!”
But none of them top my excited group of friends explaining to me, a clueless white person, how funny it is that Russell, the eager boy scout who accompanies grieving widower Carl on his mission to the Venezuelan tepuis, names the exotic bird they find “Kevin.” Russell is a tiny Asian kid, they explained, and Asian guys named Kevin are a whole Thing. To me, Kevin was just a bird named Kevin; to them, it was an entire sly cultural in-joke.
Look, Up is only the second animated film ever nominated for a Best Picture Oscar, deservedly, and it’s my favorite Pixar film because of its warmth, its humor, and its painful truths about grieving and letting go. But it’s also full of small coded details like “Kevin,” and they remind me that it might be even more special for eager Asian kids like Russell than it is for me. I love Up all the more for that. —AR
5. Ratatouille (2007)
Ratatouille is best remembered for its triumphant finale, which serves as a thesis on the nature of criticism — one that almost feels like director Brad Bird is speaking to film critics directly through the intimidating food writer Anton Ego. But Bird isn’t thumbing his nose at critics or their work. Instead, his film’s message is that love for art of all forms is what inspires all critics, professional or otherwise; that’s what drives us, and that’s what we mustn’t forget.
What makes this remarkably strong takeaway so effective is that Ratatouille works as a great example of why film critics are so drawn to the medium. The movie is a work of art on its own — beautifully animated, with a well-constructed story. And its characters, from the dopey cook Linguini to “little chef” Remy the rat, each tell us something about art itself. Art is an opportunity to share our passion, and it can offer pleasure, no matter the bona fides of its origin.
This resonates even if you aren’t a critic by trade. In all art, we seek entertainment, or joy, or excitement. And Ratatouille offers all of that in spades.The movie benefits from the work of a Pixar crew performing at its height, even if its high-concept, slightly bizarre story — a rat that cooks? It’s weird! — could suggest at first that it may not sing for audiences quite as beautifully as some of Pixar’s other stories. Not the case: As Anton Ego says, “A great artist can come from anywhere.” Ratatouille is a great artist, and great art. —AF
4. Finding Nemo (2003)
Finding Nemo’s greatness can be measured in the sheer number of characters — minor and major — that you think about long after the movie’s over. There’s Nemo, Dory, and Marlin, the core trio, but there’s also Gil, Bruce, and even smaller characters like Peach, the Allison Janney-voiced starfish, and Pearl, the baby octopus who inked herself. Nemo succeeds in not only capturing the natural beauty and wonder of our real-life ocean but also telling a story about parenthood and friendship and, to our own deep sadness, the fragility of life in a way — and through diverse, myriad characters — that we don’t usually think about. —AAS
3. Toy Story (1995)
Rare is it that a film studio gets its first-ever feature just right. But Pixar came out of the gate as a unique breed: a studio that dared to release a full-length animated movie created entirely with computer-generated graphics. In 1995, that was unheard of; traditional animation was still dominant. Despite having little competition on that front, Pixar wowed audiences not just on the basis of Toy Story’s impressive novelty but also through the film’s sheer wit, storytelling, and maturity. Its introduction of Woody and Buzz Lightyear, opposites who very much repel each other until they naturally attract, contends with love, friendship, and the meaning of life in funny and thoughtful ways.
While Pixar’s work has become more technically advanced in the past two decades, I’m still so drawn to how the original Toy Story feels lived-in and expansive, like every nook and cranny of Andy’s room could be worth exploring. As a kid, I found that world to be, well, a world: somewhere I felt safe and comfortable and excited to see more of. That’s something I continue to look for in movies, particularly animated ones; while Pixar continues to craft living, breathing universes for its stories, Toy Story’s remains the one I feel as though I know best.
It helps that Toy Story is the longest-running franchise in Pixar’s oeuvre, just slightly edging out Cars. What makes Toy Story so essential where Cars feels exhausting, though, is the toys. Watching Buzz and Woody’s friendship grow is an emotional experience; the 90-minute journey they take to accepting one another remains powerful. Above all, their relationship is why the toys’ (and Pixar’s) inaugural outing remains as funny, dazzling, and satisfying today as it was in 1995. “You’ve Got a Friend in Me,” indeed. —AF
2. The Incredibles (2004)
Brad Bird is the closest thing Pixar has to an auteur filmmaker, who makes movies with a strong, personal vision that keep returning to the same ideas over and over. And his first movie for Pixar, The Incredibles, showed off his talent for large-scale action sequences balanced against small-scale domestic comedy, in a tale of a family of superheroes living in a world that’s made superpowers illegal after some unfortunate incidents and massive amounts of property damage.
What’s great about Incredibles is how it balances the two sides of its personality, while also allowing for a surprisingly meaty dive into ideas about what it means to be “special” and making room for other people to have their own sense of specialness. The ideas in this film have gotten Bird accused of being a Randian objectivist, but what’s so smart about The Incredibles is how Bird never pins himself too thoroughly to any one point of view. This is a movie that can be read on many different levels, from a simple family comedy to an action movie imbued with philosophy to a genuine war of political principles that manages to pack in some great sight gags. —EV
1. Wall-E (2008)
All by itself, Wall-E’s sublime, dreamy opening sequence, in which a lonely android compacts trash on a desolate planet while enjoying the strains of Hello, Dolly!, would warrant its place at the top of our list. Like a little mermaid who’s been collecting human gadgets and gizmos for several hundred years, Wall-E has managed to retrieve something like a soul out of all that discarded refuse; like us, he’s entranced by musical theater, baffled by sporks, and full of love. This image of an adorable Curiosity-like rover keeping his spirit alive after centuries of solitude is simultaneously full of heartbreak and hope, and the film rides that delicate balance all the way through its wrenching highs and lows as Wall-E and his fellow android Eve fight to bring humanity home.
Pixar’s finest movie trusts frequently in its purely aesthetic storytelling, keeping viewers absorbed through long, dialogue-less scenes that marry stellar animation, intricate world-building, and superb sound engineering. Its perfectly humanistic androids have deeply human hearts, in contrast to actual humans, who’ve been navigating in space for so long that they’ve fallen into a lethargic simulacrum of real life. Writer Andrew Stanton has constructed one near-perfect story after another for Pixar over the years, but with Wall-E, he gets more private than ever, simply by presenting the dystopian future as a product of everyday environmental mismanagement, corporate greed, and out-of-control consumption and wastefulness, and letting the results largely speak for themselves.
Even as it dives into a conversation with Kubrick and Sagan, Atompunk and Heinlein, Wall-E never fully feels retro, because it never stops asking painfully contemporary questions. We need its dose of clear-eyed, restorative faith, perhaps even more now than we did a decade ago. —AR
1. Self-evaluation: what interests to you about opening a franchised business? Are you ready, willing and able to work long hours, including weekends and holidays (especially in the beginning)? Can you commit to following pre-determined business methods with very little variation, if any variation at all? Can you accept paying a portion of your profits to another entity (the franchisor)? Are you comfortable with the reputation of your business being largely reliant on the franchise’s network and not just your business unit?
Moreover, how much of your personal cash are you willing to part with to establish the business? Unless you’re fortunate enough to have enough money personally, do you have adequate assets (savings accounts, real estate, securities, etc.) to secure a loan?
2. Pick a franchise consultant to assist you (optional): despite all of the information available online, it’s still a good notion to enlist the help of a franchise consultant to help guide you through the process.
Much like a real estate agent is a good ally in the purchase of a home, a franchise consultant has industry-specific knowledge and can relate possibly complicated topics (including aspects of agreements and disclosure documents) to you in a more understandable way. A franchise consultant could also potentially keep you from experiencing pitfalls that may happen without their expertise.
3. Research: what kind of businesses can your area sustain—and are those the type of businesses you’re interested in opening? Federal and state governments provide free access to statistics and other data. Use the info gathered to match up your personal situation and the business environment of your area with a suitable franchise system. Plus, your common sense and gut feelings are good guides to figuring out what businesses are and could be sustainable in your locale.
Once you’ve narrowed your research down to a few strong contenders, request the franchise application from those companies. After the franchise decides that you could be a good match for their system, they will send you a copy of their franchise disclosure document (FDD). The FDD will give an even deeper look into their business system.
4. Visit a ‘discovery day’: a discovery day is an in-depth meeting between the franchisor and one or more potential franchisees. It can take place at a local outlet, but most likely will happen at the company’s corporate office.
Often, the franchisee or franchisees in attendance will see presentations about what the franchisor can offer in terms of support, and can ask questions. If done at the corporate office, a tour of the different departments and introductions to franchisee training and support personnel are common.
5. Speak to other franchisees: within the FDD provided by the franchisor is a listing of all current franchisees in their system. Find a few that are close to you and pay them a visit. Are they satisfied with the franchisor’s support? Is the reality of the business in line with prior expectations (financially and otherwise)?
6. Find a suitable location: if you’re located in a low traffic area or an area where there are no complementary businesses around, how are you going to get customers? The franchisor will delineate certain parameters for your territory in the FDD and franchise agreement. In addition, most franchisors assist with site selection. If you choose a suitable place for business on your own, the franchisor will have to approve your location before you can move forward.
7. Choose a franchise and secure funding: after you’ve completed your research, it’s time to make the big decision—which franchise system will you invest in?
Once you have decided, you’ll have all of the information necessary to complete a business plan and present it to potential lenders. There are numerous financing options out there for you to consider: bank loans, SBA (Small Business Administration) loans, HELOC (home equity line of credit), etc. Remember, you’ll need enough cash reserves to cover expenses until the business begins to turn a profit, which in some cases can be months after opening.
8. Sign the agreement: while many franchisors have rigid franchise agreements, some franchisors may be more flexible about negotiating terms in the agreement.
If the franchisor is willing to negotiate certain terms (like lease parameters), it’s a good idea to seek counsel from a lawyer with franchise-specific experience to find the best solutions for your particular situation. If the franchisor does have a rigid franchise agreement, that isn’t a cause for concern. Remember, franchises are based upon a proven system and consistency of the brand. If the franchise agreement for the brand you chose is overly negotiable, it could be cause for deeper investigation.
9. Obtain all necessary permits and insurance: each industry has its own requirements for permits and insurance. Regulations by state, city, county, etc. will vary as well. The franchisor will likely have background knowledge of the permits and insurance needed to operate their business system.
However, it’s a good idea to check with local authorities to ensure compliance. Two good websites to use as a reference to what permits and insurance might be necessary for U.S. businesses to obtain are the Small Business Administration and FindLaw.
10. Hire staff and attend the training: the number of staff members needed to run the operation will depend on the type of franchise chosen.
One of the most appealing aspects of franchising to those wanting to open a business is the training component. Franchisors usually provide training, in a combination of classroom and practical experiences, to at least the franchisee and another manager. A copy of the franchise operations manual is also typically presented at this time.
11. Open your franchise business: before opening, you will need to alert potential customers to their new marketplace option. Franchisors will often have defined processes for signage, ads, and other initiatives to be performed. Estimates for these initiatives will usually be a part of the start-up costs quoted in the FDD.
Some franchisors will do a ‘soft opening’ before the ‘grand opening’. A soft opening is designed to smooth out problems with the operation of the business before the big marketing blitz and hopefully larger crowds that will come with the grand opening. Some franchisors also arrange for a corporate trainer to be on hand at the franchise location during the opening days.