8 Steps To Franchise Your Business
You have worked hard creating your business from the ground up, pouring all your blood, sweat and tears into it. You have built a brand that your customers know and trust, but you want more. If you want to expand the reach of your brand and grow your business than franchising your business might be the perfect solution for you. It is a great way to expand into new territory without as much upfront cost as if you built new company-owned locations. This doesn’t mean, however, that choosing to franchise instead is easier. Just because your one business is doing really well is no guarantee that franchisees will be interested in buying into your brand.
To be successful, you need to do your homework and know what you are getting yourself into before you sign any paperwork. Also, make sure you are current on all federal and state regulations for the franchise industry. Here some key steps you will want to take to successfully franchise your business.
Make sure you have the right concept
Not all business concepts are conducive to franchising. It is not enough to have a profitable bottom line. You need to offer familiar products in a unique way. For example, a burger restaurant who only uses organic, grass-fed beef. If a concept is too different, it might be harder to replicate on a large scale and it might not generate enough interest for multiple units. It needs to be a model that your franchisees can easily follow and have similar success with. Sometimes being too unique can be bad for business.
Try expanding on your own first
There are a lot of factors that can play into why a particular business is successful. Before franchising, you need to make sure that your business’s success is not dependent on a certain location and customer base or one particular person’s talents. By opening up new locations yourself first, you can get a better idea if your success can be duplicated in other locations.
Do your research
You never want to go into anything blindly so always do your homework. You know that your concept is successful in your own little nook, but is there a demand for it in other places in the country? How about internationally? Is the marketplace already glutted with too much of the same thing? If there is already a pizza shop on every block, is there really room for another one? What does your business bring to the table that others do not? Make sure you have answers before you commit to anything.
Ask yourself if you have the right personality
Not everyone is equipped with the right personality to be a franchisor. It definitely requires a different skill set then what makes a good individual business owner. As an owner of an individual business, you probably have your hand in every aspect of daily operations. Each day is filled with new challenges as you interact with customers and staff as you focus on delivering the perfect product. As a franchisor, you will be taking more of a backseat when it comes to daily operations of your stores. Instead you will be focused on selling franchises and providing a h2 support network for your franchisees. If you are more of a hands-on type of person, this switch in roles might drive you crazy, especially if you like to have control in every aspect of your business. Also, if you are looking for quick cash without much effort, then this isn’t the right path for you either. If you don’t put the time and effort into developing a rock solid model for franchising your business, you will most likely fail.
Consider all your options
If you just want to grow your business and are not married to any one particular way, then make sure you explore all your options before making a decision. Becoming a franchise can cost hundreds of thousands of dollars so you don’t want to go into it lightly.
Comply with all legal regulations
If after all your soul-searching and research, you are still 100% certain that franchising your business is the right move, then you will need to fill out a lot of paperwork. First, make sure you register with the Federal Trade Commission and also follow any registration procedures at the state level as well. An experienced franchise consultant can help guide you through all the paperwork.
Lay down all the nuts and bolts for your franchise program
You will need to carefully lay out how much you will charge for the franchise and royalty fees as well as which states or countries you will offer franchises in. You should also lay out any other requirements that you expect the franchisees to follow like what products they will offer and if you want them to buy everything directly from you as well any restrictions to the design of the store. Will you offer advertising help or will each franchisee be responsible for their own? Typically, franchisees are responsible for their own setup and operating costs as well as scouting out their own locations and hiring staff. It is up to you to carve out exactly what you kind of support you will offer them. You will want to develop a training program and support structure that will ensure the success of your franchisees.
Hire the right staff to support your franchise venture
You are not going to be able to handle all of the franchise side of things on your own. You are going to need salespeople, trainers and marketing specialists to help you. Picking experienced, talented team from the beginning will help ensure your success.
Franchising your business can be a long and sometimes expensive road, but it is worth it in the end if you have a passion for it and are really invested in helping others become successful business owners. These steps are a good framework to follow as you get started. Go ahead and put your own inedible mark on the world by franchising your business.