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- Request Information To Franchise Your Business
Are you wondering what you need to know before starting the process to franchise a business?
Franchising is one of the most powerful ways to expand a business, allowing you to scale while leveraging the investment and effort of franchisees.
However, it can also be intimidating, with a maze of information available online, making it hard to know what to believe.
The process to franchise can feel like an uphill battle and while you may have an idea of the necessary steps, everyone you speak with seems quick to take your money.
You may keep asking yourself: "What am I signing up for?" and "What should I know before I even get started?" This quick guide will help answer those questions.
Get Started!Franchising is not a set-it-and-forget-it project. It requires a substantial time commitment, both before and after launching your franchise system. At this stage you are probably wondering how to franchise, what it will take and how much of my time will be needed. And while we have made the process to turn you into a franchise quite simple with 8 easy steps your involvement is paramount.
Before you can officially offer franchises, you will need to invest some time in working closely with us. Your involvement is key to ensuring that your franchise program aligns with your business values and culture (take a look at “How Much Time to Franchise a Business”). We have a very hand-holding process and you are involved in every step of process.
There are many steps to franchising and we will need to spend time dissecting your business. This includes analyzing how you got started, identifying what makes your brand successful, and pinpointing the key drivers of your current operations.
A critical step when we put your franchise program together is defining your deliverables as a franchisor. For example what you offering your franchisees in exchange for the fees you collect (such as franchise fees and royalty fees). Franchisees will expect training, operational support, branding and marketing assistance; so it’s important that we clearly establish your role in their success.
Once your franchise program is up and running, you’ll need to devote time to franchise recruiting and marketing. This includes identifying your target audience, deciding where to market and creating effective advertising campaigns to attract potential franchisees.
You will also need to allocate time for vetting franchise applicants. Establishing a solid franchise qualification process is critical to ensuring that you select the right people (take a look at “Finding the Perfect Franchisee”). Interviewing potential franchisees and assessing if they have what it takes to run your type of business will take effort.
Hosting discovery days is another essential part of the process when franchising. A discovery day allows you to meet potential franchisees in person and provide them with an inside look at your business. This face-to-face event helps ensure that you both are a good fit for each other before moving forward.
Your responsibilities don’t end once franchise agreements are signed. Ongoing support is a fundamental part of franchising (see more on your role as a franchisor). Franchisees expect you to be available for guidance when they need it and as challenges arise. While franchisees operate their own businesses, they rely on your experience and expertise to help them navigate challenges.
Ongoing coaching, mentoring, and consistent follow-ups are necessary to help franchisees stay on track. Many of the issues franchisee’s face will be ones you’ve encountered before, so sharing your insights and wisdom can be invaluable to their success.
This means tracking and analyzing key performance indicators (KPIs) which is another critical component during your ongoing coaching. As a franchisor, your role includes using your experience, results and data-driven insights to help franchisees improve operations and improve profitability. What you measure can be improved, so doing KPI analysis an essential part of your ongoing support system.
Franchising is more than just expanding your business; it’s starting an entirely new business, which is the business of franchising. Unlike opening additional locations yourself, franchising doesn’t require immediate investments in real estate or staffing, but it does require you have the financial resources to cover franchise development costs and working capital.
Franchising requires a financial commitment upfront. You are NOT able to make any deal or collect any monies up front from anyone interested in becoming a franchisee before you are approved to offer franchises. So the idea of using someone else’s money to cover your franchise expenses, is thrown out the window.
Beyond the initial investment that allows you to franchise, there are other costs associated with preparing your business for franchising such as website development and creating franchise marketing collateral.
There are also some states that require you pay a fee and get their permission to offer franchises. These states are called Franchise Registration States and issue you a permit to be able to franchise in their state (take a look at "Franchise Registration States Some States are Tougher"). For these additional expenses, this is where your working capital kicks in.
Once your franchise program is launched, ongoing franchise obligations must be met. One of the most important expenses while you are franchising is updating your Franchise Disclosure Document (FDD) annually. Various sections of the FDD must be revised to reflect changes in investment levels, operational costs or other modifications that decide to make to your franchise program.
After updating your FDD, you will also need to renew your franchise in the different registration states (only if you went through the franchise registration process in those states). The renewing of your franchise registration involves submitting the updated FDD for review by the state examiners, who may request additional documentation or require specific revisions. Unlike the initial filing, renewals are typically less rigorous but still require time and money.
Another ongoing expense is updating your audited financial statements. These financial records provide transparency for potential franchisees and demonstrate the financial health of your franchise system. Updated audited financial statements are a requirement for the FDD and your ability to continue to offer franchises.
Before you pull the trigger to start the process to franchise, it’s essential to work with a reputable and experienced franchise development company. The franchise industry is filled with predators and companies that promise fast results that often prioritize their own agenda over your success.
Be cautious of franchise marketing companies, otherwise known as franchise brokers (take a look at "Franchise Brokers vs Franchise Developers What You Need to Know") who claim they can both develop and sell your franchise. This is a conflict of interest. Any reputable attorney will advise against working with a company that wears both hats. Instead, choose a franchise development firm, like The Franchise Maker who specializes in creating franchise programs with a transparent, one-time flat fee and no hidden agendas.
Franchising can be an exciting and rewarding journey, but only if done correctly. If you’re serious about wanting to franchise your business, just like with anything else it is important to have the right team behind you guiding you every step of the way.
"Before selecting The Franchise Maker, I met with several other well-known franchise groups. Their services were extremely expensive and they didn't really seem to care about my business model. I wanted someone..." [ read the rest ]
"After seeking guidance from mentors, lawyers, and the internet it always led me back to the same place, unfranchised and confused about the process. From the moment I spoke with Dave I knew he was a straight shooter and..." [ read the rest ]
"Dave created our entire franchise program keeping all my concerns top of mind, putting together a very attractive franchise and once filed with the State we got approved rather quickly without a hitch..." [ read the rest ]
The Franchise Maker is a proud supporter of the Susan G. Komen Foundation to find the cure for breast cancer.
