Recently, a business owner contacted us about how to franchise his business and revealed that he had obtained his competitor’s franchise documents (though he didn’t say how). He had a question he wanted to ask about “copying your competitor” and simply switching out name in the franchise documents. Here’s how the conversation started out:
“I found an old version of my competitor’s franchise documents. My business is virtually the same. They’re an (ABC) company; I’m an (ABC) company! We really do the same thing! So can I just copy my competitor’s franchise documents for my own purposes by just switching out their company name for mine and be done?”
Okay, we KNOW that this thought has crossed the minds of MANY of you who are thinking about franchising. And we can understand the temptation: the idea that you can do it yourself and avoid paying someone else to handle the franchising process. Plus with everything out there on the internet it is hard to know who to trust without any scams. Copying your competitor’s franchise documents and simply switching out the name sounds like an easy shortcut, but this kind of shortcut is really not a shortcut at all and will very likely come back to bite you in the long run!
Are Franchise Documents All the Same?
As a business owner looking to franchise your business, you must stay away from copying your competitor’s franchise documents because not all franchise programs are the same (and let’s not forget about the problems you can get into from a copyright standpoint!). In reality, every business and how it operates is different.
Therefore, every franchise program we build is different, reflecting the various unique characteristics of your business that you are wanting to offer as a franchise. Even if your business is similar to other franchises that are already out there (read more about our strategy when building a franchise program for you).
One example is that the deliverables you are going to provide to your franchisees will be different than the deliverables of your competitors. In addition the way your business is setup, costs, how you purchase products, execute services and even your philosophy varies greatly from your competitor’s. These are just a few of the details that will differentiate your business and ultimately your franchise opportunity.
While two businesses may appear to be the same (for example real estate companies), they operate differently. And if you blindly copy your competitor’s franchise documents, then you’re going to pigeonhole yourself into their system and way of doing things because that is how their franchise program is built.
Protections Are Lost
On an even more serious side, there will be certain sections in your competitor’s franchise documents that are specific to them and won’t fully protect you. If you get a hold of franchise documents that are a few years old, the verbiage in those documents may not be up to date with recent franchise industry developments such as changes as a result of recent franchise litigation, laws passed or new franchising regulations.
In particular you are going to want to make sure you are protected against liability claims (as part of our franchise development services we explain how you are protected as a franchisor). In a franchise-related liability claim, typically it is an attempt for someone to try and impose liability on the franchisor (for example make you responsible) for actions that stem from how your franchisee is operating and managing their business. As a franchisor you want to stay away from any type of liability claims.
Get it Done Right
So embrace the uniqueness of your business and do things right from the beginning. Drop the copycat urge! At The Franchise Maker we will help discover all your secret formulas, unique methods and techniques in order to create a unique franchise program that reflects your business (for more on this topic you can read “A Custom Approach to Franchising Your Business”). We encourage you to call us directly at 1-877-615-5177. We will be happy to answer any questions you have about franchise development process and ultimately determine if franchising makes sense for you.
- Is My Business Franchisable?
- What are the Elements of a Franchise Document?
- Do I Need All Parts of the Franchise Development Process
- You Need More than Just Documents to Franchise Your Business
- What to Look for in a Franchise Development Company
- How to Franchise a Restaurant
- About The Franchise Maker
