So, you have a successful business… but are looking for a new strategy to boost its growth.
Franchising can certainly do the trick! Trusted for decades, the franchise business model has proven successful the world over, helping small, independent companies grow quickly and efficiently due to its many advantages it offers entrepreneurs.
But how exactly do you start franchising a business? It may seem complex at first, but can actually be done by following a few simple steps. We examine how to franchise a business below in detail!
1. Evaluate Your Current Business
First and foremost, take a step back and evaluate your current business to decide if franchising is right for you.
Take a hard look to see if your company is suitable for the franchise business model. Consider your current business model and long-term goals, conduct market research, and check your financial data carefully. If your personal and business goals are aligned with how franchising works, then it’s time to get in a new mindset and prepare to franchise your current business!
2. Research the Legal Requirements
The next step in franchising a business is to learn all of the legal requirements.
As a franchise, your company needs to conform to a new set of rules – so be sure to understand them! Before you actually start advertising and selling franchise, make a point to thoroughly research the FTC Franchise Rule and what franchise disclosure documents (FDDs) are in order to ensure your business complies with all Federal and state franchising regulations.
3. Decide on Your Business Model
After researching and learning all of the necessary legal requirements, it’s time to decide on what your business model will be and how your company will operate as a franchise in the future.
Think about what your franchise fee and royalties will be, the terms of your franchise agreement, what your franchisee training and support programs will be, and the like. Once these are decided, it’s time to start drawing up the rules for your franchisees!
4. Create an Operations Manual
The next step in how to franchise a business is to create an operations manual for your new franchisees. Your manual functions as a guide for your franchisees, so be sure to make it as informative and detailed as possible to help them in the day-to-day operations of their franchise units.
5. Register Your Trademarks
Another key step in franchising a business is to register your company’s trademarks. Before officially registering as a franchise, be sure to register your company’s trademarks with the United States Patent and Trademark Office.
6. Register as a Franchise and File Your FDD
You’re almost ready to become a franchisor!
Next, it’s time to establish a new franchise company, usually as a limited liability company or corporation, in order to start advertising and selling franchises. Afterwards, officially register as a franchise and draft up an FDD to submit for filing and registration. Make a point to double check with your compliance with all state and Federal laws and regulations at this time too, especially in franchise registration and filing states you intend on expanding into.
7. Recruit Franchisees
Afterwards, it’s time to get the key support staff in place and start recruiting franchisees to help your new franchise grow in target markets. Prior business experience can be helpful, but most franchisors seek out franchisees that have a unique combination of dedication, drive, and entrepreneurial spirit in order to succeed.
8. Train and Support Your Franchisees
Finally, the last step in franchising a business is to train and support your new franchisees. Follow the rules you’ve laid out in your FDD and business plan to make a point to take any feedback seriously in order to improve the training and support process. If your franchisees believe something can be done better, listen to them carefully. After all, they’re the ones powering your franchise company now!
Franchise Your Business Today!
Franchising a business allows franchisors to reap the rewards of more growth and less risk compared to other business models. The final step is to get out there and start on the path to franchising your business today so your company can enjoy its many benefits for years to come!