Step 1: Determine the readiness of your business as a franchise concept. The most important thing that you should do is to determine if your business is franchisable. Apart from having a solid track record of sales, you should also take other important factors into consideration such as the business concept, track record, profitability, and the consumer behavior.
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Step 2: Think about How You Would Like Your Business to Grow and begin to formulate goals for expansion. For you to have a successful franchise development program, you must establish attainable end goals for your brand and business model then implement business strategies that will take your franchise brand there. We typically recommend a regional level expansion model initially then expanding to a national or international level. By keeping your franchise growth close to home initially, you may be able to manage the expansion more effectively and help your franchisees attain higher levels of profitability. This in turn will support you in adding more outlets, adding new marketing strategies and establishing a strong base for your brand before expanding to farther reaching territories.
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Step 3: Register as a franchisor – For you to offer franchises of your business model, it is required by the Federal Trade Commission that you register as a legal franchising business before conducting any marketing or sales. It is very important for you to fulfill the legal requirements. While complying with your local or national franchise authority, you will be asked to provide more detailed information about your business including your business experience, audited financial statements, and how you intend to work with the franchisees.
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Step 4: Screen Your Franchisees – Before you start selling or begin offering your franchise for sale, you should take your potential franchisees through thorough a thorough screening process. Because they are going to represent your brand and trademark, you must ensure that you choose the right people who are capable of steering your business in the right direction. Once you identify the right franchisees, make sure you help them understand the terms, rules and regulations before you sign the franchise agreement. It is your responsibility as the franchisor to explain and help franchise buyers fully understand the agreement and structure of the franchise model before anyone executes the franchise agreement.
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Step 5: Offer Support to Your Franchisees – As the franchisor, one of you your most important responsibilities is to ensure that your franchisees get all the necessary support they need at all times throughout their relationship with you as a franchisee. It is critical that in your franchise model, you are offering true value in your franchise program to franchisees. Franchise systems are dependent on selling successful businesses. If your franchisees aren’t successful, you won’t be successful as a franchisor. Ensure that you provide them with enough training and support to keep your franchisees operating successfully.
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For more information on how to franchise your business and whether your business is ready for franchising, contact us.