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How to Start a Franchise in Nigeria: The Full Guide




Have been thinking of starting a big brand in Nigeria? Do you want to start a brand that can stand the test of time but you are not ready to start the process from the beginning? You have brands that share the value with you. And you will love to align yourself with these businesses – using their name, logo, and way of business.

This means that you want to start a franchise business in Nigeria. In today’s article, we are going to be guiding you on how you can start this kind of business and everything else you need to know about franchising in Nigeria.

Starting a franchise is very profitable today because it will allow you to own a company that is already successful and popular as long as you agree to the terms and conditions in the agreement.

What is a Franchise?

A franchise is a legal permission given to an individual or a firm to sell a company goods or render its service at a particular location for a given period. The ability to do this is not free. You must pay money to the company of choice which will allow you to use their name, brand, and trademark as yours. 

Is Franchise Profitable in Nigeria?

Starting a franchise business in Nigeria can be very profitable today because many Nigerian consumers want to associate themselves with popular brands while living in Nigeria. For example, Nigerians love KFC. They love the restaurant because they have visited it abroad and will love to still enjoy its food when they return to Nigeria.

As an entrepreneur in Nigeria, you can pay KFC a franchise fee to be able to create KFC branches in Nigeria.

Popular Terms in Franchise

There are terms in the franchise that you need to know the meaning of in order not to look like a novice.

1. Franchise fee

This is a fee you pay to a company to rent its brand name, color, and way of conducting business for a certain period. The period depends on how many years in the agreement. How much you pay as a franchise fee differs from company to company.

2. Franchisor

The franchisor is the company that gave you its brand to use. 

3. Franchisee

The franchise is the person or firm that is paying a company to use its brand. In this case, you are the franchisee.

How to Start a Franchise in Nigeria

Below are the steps to start a franchise business in Nigeria.

1. Do your Findings

Before you start a franchise with a big company, you need to find out what you stand to gain. There are many hidden terms in the agreement. You need to properly scrutinize the agreement and be sure that you will have a lot to gain – making sure that there are more advantages than disadvantages from top to bottom.

The franchise fee is a disadvantage because the money is usually much as it runs into millions of naira. However, what are the other disadvantages? You need to do your due diligence.

2. Choose a Franchise with the Same Value

When going into a franchise agreement, it is very important you choose a company that shares the same values and goals as you. You also need to also consider your skill or what you are passionate about. You cannot be skillful in cooking and you go into a franchise with a transporting company.

You will not be able to do so much in the company because you are not using your skill. Rather you should consider going into a franchise with a restaurant. KFC or Mr. Biggs is a good consideration to go into a franchise with in this case.

3. Conduct your Market Survey

Conducting a market survey is also very important when starting a franchise in Nigeria. Since the goal of all businesses is to make profit, as an entrepreneur the thing you want to do is start a franchise in a place where the business will struggle to yield returns.

Before choosing and starting a franchise, you need to know if the product or service your franchise will render is in demand in your area. If it is possible you need to get the fact from reliable sources like government agencies, Small Business Administration, business schools, and universities. 

Other factors like the franchisor’s ranking, its disclosure document by law, capital needed to start and cost of running the franchise, support you will likely get from the franchisor, and more.

4. Choose your type of Business

You need to choose the business platform you want to operate on. Do you want a sole proprietorship platform where you will enjoy the profit and bear the loss alone, or do you prefer your franchise to be a limited liability company where you have shareholders? You need to make your decision.

It is important to note that most companies prefer to go into a franchise with a limited liability company other than a sole proprietorship.

5. Write a Business Plan

A business plan goes a long way in making you succeed in your business. In our business ideas category on this blog, we have written about why business is important and why you must write one before proceeding into a business. There is no difference here despite the fact that you are starting a franchise.

We have written an article on how to write a business plan in Nigeria. You should ask for more guidance on this.

6. Get your Starting Capital

At this stage, you need to get the capital you will need to fund your business. The capital for starting a franchise is high as I explained earlier. This capital will contain your franchise fee, money to rent a building, equipment, and money to pay your staff.

At least for the first 3 months of business pending the time that the business can make good profits. There are different ways you can obtain funds to start your franchise. We have written an article about that. You should read how to get funds for your business in Nigeria for more details on this.

7. Get your Business in Order

You need a building to operate your business. Depending on the capital you have you can rent or buy a property. You also need to buy and install all furniture and equipment. After getting all this installed you can now hire your staff.

8. Open your Business to the Public

When everything is in place, you can go ahead to start your business. Since your business is a franchise it will be very easy for you to attract customers to patronize you. Profits will come in earlier than expected. 


Starting a franchise business in Nigeria can be profitable if you follow all the tips and steps shared in this article. Do not forget that you need to also register your business under the Corporate Affairs Commission (CAC). Drop any questions as regards this article in the comment below.


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Ralph Bamigboye is an Accountant. He is the owner of, and Finance Naija YouTube Channel. He has helped many individuals to start their businesses and make money online. How can he help you?

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