5 Essential Steps Before You Franchise Your Business
Business ownership is a long, sometimes treacherous, sometimes breathtaking, journey. From the first steps of figuring out how to make your ideas come to life, to the climb of streamlining operations, to the final hike towards the most rewarding view, the journey of business or franchise ownership keeps you on your toes.
However, once you get to the top and your business reaches new heights, you will likely want to keep reaching and wanting more.
Enter the franchise model. Once you feel like your business journey has reached its peak, you can start to explore even new territory and raise the bar by franchising. If your business is already successful, in demand, and can be replicated by anyone, anywhere, you may have the perfect opportunity for expansion.
Before you franchise, you should know the roadmap to grow your business. When you understand the below 5 essential steps before you franchise your business, you can prepare yourself for this new business venture;
- Decide If Your Business is Ready to Franchise
- Make Some Hard Decisions
- Secure All the Franchising Paperwork
- Recruit the Right People For Your Franchise
- Give Support to Your Franchisees
1. Decide If Your Business is Ready to Franchise
The first step may feel like the biggest. It requires you to be honest as you evaluate your business. You will need to consider a few factors to know if your business is ready to scale.
The framework of your business must be solid, and your model should be both easily understood and simple to replicate. If your business has built a strong, successful presence and the demand is there, people will be likely to jump on board.
Do some market research on your industry trends before you move to the franchise model. Even if people are knocking down your doors to get their hands on your products or use your services, you need to be sure that this is consistent with the demand in the industry.
Before you franchise, take a good look at your financial statements. Not only will you need to be transparent about these numbers you provide potential franchisees, but you will also need to be transparent with franchisees (within the legal boundaries) regarding financial expectations.
2. Make Some Hard Decisions
As a business owner, you are accustomed to making tough calls to drive your business forward. When franchising, it is no different. You need to sit down and answer some important questions to determine your franchise model.
- What are my fees? Consider royalty, franchise, and marketing fees.
- What exclusive territory sizes can I offer?
- How do I plan to educate and train my franchisees?
- What is my marketing strategy to expand and build more brand awareness?
- What terms of the agreement are important to include in documents?
By asking yourself the hard questions before you move forward, you can choose everything from your business model to your training program materials to your financial requirements for franchisees.
3. Secure All the Franchising Paperwork
Once all the decisions are made, they need to be written and disclosed to the Franchisee. This is done through the legal documents (the Franchise Disclosure Document and the Franchise Agreement) which are binding for both you and the franchisee. In some States within the US, you will be required to submit the Franchise Disclosure Document for registration.
Once this is done, take a deep breath, sit back, and wait for their approval.
4. Recruit the Right People For Your Franchise
Once your Franchise Disclosure Document has received the necessary approvals for franchising, you are ready to start recruiting. Consider ways to spread the word about your new, exciting franchise opportunity. Create marketing resources, go to trade shows, and talk to your most loyal and trustworthy customers and employees.
You just may be surprised at how people respond to the chance to join your team and start their own business journey under your guidance.
5. Give Support to Your Franchisees
Remember: when your franchisees are successful, YOU are successful. You have already chosen the right training program and educational resources to onboard your team, but now is the time to make sure they work. Giving ongoing support can ensure that your franchisees have access to the resources they need to be successful.
Are you ready to start those first steps to your business franchise journey? Contact our FMS Franchise Consultants to set up a meeting and learn more about how we can support you through this exciting opportunity! Contact us today at.
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