5 Key Factors of Successful Franchise Development
When any business owner with a growing business thinks about expanding into new markets, one of the avenues to consider is franchising. So, what is franchise development? The process of franchise development is a proven avenue for turning a successful business into a successful chain both regionally and globally.
There are many factors that go into the franchise development strategy. Imagine if you will, a complicated recipe at the heart of a strong recurring business. This recipe, when done correctly and with proven ingredients, will feature all the components necessary to make it repeatable and reproducible by others.
FMS’s expert franchise consultants have identified these 5 key factors of successful franchise development:
- Drafting a Franchise Business Development Plan
- Completing the Franchise Legal Process
- Create Operations Manual & Training System
- Marketing In The Franchise Development Process
- Work With a Reputable Franchise Development Company
1. Drafting a Franchise Business Development Plan
Laying out your franchise business development plan and growth strategy is a very important process. This will help you and your investors to be able to visualize the direction that you want to take with the franchise. This is also something that you will be able to use when you are in negotiations with them so that you will already have all the statistics and information that they need.
A good overview of franchise strategy development should include the products and services that will be provided. The description of the buyer should include the details such as their income bracket, location and demographic details etc.
A detailed financial analysis will enable a business owner to get an idea about the feasibility of his business expansion program, and a franchisor should also prepare a detailed analysis to target potential franchisees in specific regions.
2. Completing the Franchise Legal Process
The second factor of the franchise process involves completing the legal processes necessary before filing for state registration with designated states. Franchising an existing business or starting a new business through franchising can take as little as a few months or as long as several years to complete for newly developed businesses. In either case, legalities must be followed.
These legalities fall into place in multiple states, and it takes careful planning to address each requirement with care. Therefore, without any exception, you need to find yourself a professional who understands how to create your Franchise Disclosure Document (FDD) based on the standards set forth by the Federal Trade Commission.
This is not something that should be done solely by someone with experience in franchising, but also an attorney who is familiar with the UCC Code, FTC regulations and requirements, and writing FDDs and FAs.
The franchise legal process is essential in a successful franchise system. A strong foundation will lead to a strong franchise network with potentially solid revenue and profits for years to come. As with most things in life, it is all about being prepared for what is ahead, making sound decisions and staying organized.
3. Create Operations Manual & Training System
The Franchise Operations Manual and Training System provides a comprehensive way to create documentation and is necessary for training on a franchise level that is easily repeatable. While most franchisors develop their own operations manuals, many don’t take the time or resources to make sure they are done properly.
Solid training is essential for franchisees to know about business operations. The franchisor is legally bound to create a well-documented guide to ensure comprehensive franchisee training before the new franchise commences business. The franchisor also has to provide ongoing support and refresher training to ensure the chain has standardized products and services offered.
Documentation, training, and operations manuals are necessary for the successful growth of any business that is franchising. If steps are not well documented, you can often run into problems that may hinder the development and operation of your franchise system.
4. Marketing In The Franchise Development Process
Marketing is an intangible element of franchising and is primarily based on your ability to sell the concept of franchising to franchise prospects, once the franchise process is complete.
The use of collateral materials including franchise websites, brochures, franchise presentations and flyers should be carefully crafted to pique the interest of potential franchise buyers and make them aware of all the advantages associated with owning a franchise business that offers products or services which are sold under the brand name of your company.
These materials will provide information on the number of units already in operation, locations where units can be found and contact information for those interested in owning one of these franchises.
5. Work With A Reputable Franchise Development Company
Working with a reputable franchise development company can make all the difference when learning how to franchise your business. FMS Franchise has helped hundreds of companies start and develop their business models into franchises.
The process can be intimidating, and FMS is here to help. We have put together a range of franchise services to offer our clients the best chance for success – whether you’re looking to build your own franchise or sell your franchise business.
Contact FMS Franchise today and find out what an experienced franchise consulting firm can do for your business.
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