How to Become a Franchise: What it Takes!

So your business is doing great. People love what you offer, how you do it and you are building a solid reputation in your market. And now you are contemplating, should you open or start more locations on your own or is franchising it the way to go? This makes you wonder if you have what it takes to become a franchise and if so you have no idea how to franchise, where to start or who to trust.

Here are a few things to take into consideration when thinking about franchising your business and answers that will help identify what it takes to franchise not just in your local area, but all over the United States.

A True Assessment of Your Business

You should be thinking about how much control you want to over each location. Franchising means teaching someone how to setup and run your business then letting them handle the day-to-day operations of the business. You may find this freeing, while other business owners find it challenging to relinquish control (take a look at “Is Franchising for Control Freaks”). Ask yourself: Are you ready to entrust others to operate your business and represent your brand under your guidance? Many business owners choose franchising because it allows for quicker growth into markets they could not otherwise get into themselves while using the resources (financial and talent) of an excited entrepreneur.

However if relinquishing control of day-to-day operational control gives you nightmares, then organic growth is your answer. Organic growth is a fancy way of saying company-owned growth or doing it yourself. There are some pros and cons to organic growth (read more about organic growth vs franchising “How to Start a Chain Business”).

What Are Your Expectations

Why and where do you want to grow? Is it to be the first to franchise your type of business, to dominate your market, to create a legacy or to fulfill a personal vision? It is a good idea to think about your end game (take a look at “What’s Your End Game Franchising May Play a Role”) because when it is all said and done, it is a good idea to identify what you want to accomplish by franchising.

Speaking of growth, it is important to identify those expectations. If your growth expectations are unreasonable then that could lead to dangerous behavior, especially when it comes to bringing on franchisees. One of the Biggest Risks to Franchising is growing too fast. So it is important to have realistic expectations when it comes to franchise growth all of which depends on your type of business and how complicated it is to get the business up and running (just to name a few).

Identify What Belongs to You

Intellectual property includes your business name, trademarks, taglines, and any other branding elements that you use to advertise and market your business. Part of the process to become a franchise is to register your trademarks with the United States Patent and Trademark Office. This solidifies your ownership of your trademarks (name, logo, slogans, etc.) and provides an element of protection against others who try to copy your trademarks and compete against you. Protecting your intellectual property through is crucial to safeguarding your brand’s identity and is fully addressed in your franchise program.

What is Proprietary

Ask yourself what is proprietary. In other words, something you created or developed that is specific to your business or helps you run your business. This could include a widget you created to help you complete jobs, some magic formula or specific process, operational procedures, software or customer service protocols. If you operate a restaurant then add to that your recipes or specific combination of ingredients (learn about how to franchise your restaurant). Franchising relies heavily on systems and processes so protecting such trade secrets is the cornerstone of franchising.

Uniqueness

Besides trade secrets, think about what else sets your business apart and makes it unique. For service-based businesses, this might be your exceptional customer service, unique offerings, innovative approach or special way you perform services. For example, a cleaning service that uses eco-friendly products, guarantees same-day service and sends out cleaning technicians in lingerie could stand out in a competitive market.

Regulatory Requirements to Franchise

The Franchise Disclosure Document (FDD) is the lynch pin of the franchising process. It’s a comprehensive document (actually a package) that outlines the relationship between you and your franchisees and is necessary for you to have before you start offering franchises. The FDD package details the costs of buying into your franchise, the do’s and the don’ts, the non-negotiables and the responsibilities of both parties. In other words it is the road map to the entire relationship that also offers protections for you.

A well-drafted FDD provides numerous protections for you as the franchisor. It safeguards your intellectual property, trade secrets and what you have that is proprietary. It also includes protections against joint-employer liability and even addresses non-competes. These protections are essential to maintaining the integrity of your business and your franchise system.

Registering Your Franchise

Once you have an FDD that has been approved by a franchise attorney and meets franchising requirements then in most cases you will be good offer franchises in your own state and all over the United States. However there are a handful of states that require you file your franchise program in that state and secure a registration (take a look at “Franchise Registration States Some States Are Tougher”). Registration involves paying a fee and submitting your FDD for review and approval by an examiner in that state.

Franchise registration states have additional regulations beyond federal requirements all in an effort to protect the franchisee and safeguard the economy. There are fourteen franchise registration states and each of those states vary with regards to complexity. The top four toughest states include California, Maryland, New York, and Illinois. Complying with these regulations can be complex, so working with an experienced franchise developer coupled with an experienced franchise attorney is essential.

Work with an Experienced Franchise Developer

Franchise development companies, such as The Franchise Maker, help turn your business into a franchise by guiding you through every step of the process. This includes strategizing with you, identifying your deliverables, help defining your franchise training program and creating your FDD. However, be cautious not all companies who hold themselves out as offering franchise development services are equal (take a look at Franchise Development Services Let’s Clear the Smoke”). Approach anyone you talk to about franchising your business with your eyes wide open.

Not all franchise development companies have your best interests at heart. There are a lot of predators out there that prioritize money in their pocket over your long-term success, leaving you with templated documents and inadequate protections that can easily lead to costly mistakes and lawsuits. Beware of predatory companies that make exaggerated promises. Stay away from companies who say they will make a franchise and sell franchises for you. It is a conflict of interest for any company to make and also sell franchises (take a look at Franchise Brokers vs Franchise Developers What You Need to Know).

The Franchise Maker: Your Trusted Solution

We are a true reputable franchise development company recognized for our honesty and integrity. We specialize in helping businesses transition into franchising, ensuring all requirements are in place. With a focus on honesty and transparency, we are a trusted solution for business owners ready to take the leap into franchising (don’t just take our word for it see what our clients have to say).

Becoming a franchise requires careful planning, introspection and the right support. By assessing your business, understanding regulatory requirements and working with us we can help transform your business into a thriving franchise system. If you’re ready to take the next step, consider calling us at 1-877-615-5177 for an honest, straight-forward and non-intimidating conversation to see if franchising makes sense for you. GET STARTED!

How to Become a Franchise: What it Takes!