10 Tips for Franchising Your Business

1. Be able to commit to the franchising as a new business venture.

Franchising is not the same as running your core business. You need to focus on marketing and selling franchises, and then providing support and training to franchisees. Make sure you and your team are not already stretched so thin that you or they are unable to devote sufficient time and effort to the project. You may want to consider adding a new team member to take lead on the project.  And, taking a team approach and learning to delegate tasks for franchising will aid in your ability to deal with franchisees.

2. Make sure your concept is desirable and profitable.

Franchising is not a means to save a dying business. It’s a great way to grow exceptional businesses.  So, if you are going to franchise, it is important that your concept be well defined, that the business model is capable of replication, and that it is above all else, exciting and profitable.  Nothing sells franchises better than happy and profitable franchisees.

3. Dial in your Brand.

Potential franchisees are looking to buy into a brand (i.e., trademark, service mark, trade dress and copyrighted materials) that brings customers to their doors—or more importantly to their cash registers.  The “Brand” needs to permeate all aspects of your businesses.  It should reflect who you are and the ideas you stand for.   Your branding has to be world class, and protectable. You can’t build a franchise system or brand if you can’t protect your name and trademarks/service marks.  If necessary, you may need to modify your existing brand to be able to obtain trademark or service mark rights.

4. Create and foster a Great brand culture.

Culture is important.  Both your end customers and franchisees will notice the difference.  Franchisees, even more so than employees, seek a culture of inclusiveness, where their efforts and ideas are valued, and where each is treated with respect. Your culture should encourage and require responsibility, honesty and transparency.

5. Make sure you can provide the training needed.

Franchising is, at its essence, training others on how to operate your your business system.  You have to be able to train prospective franchisees on how to start the franchise and operate after inception.  To do that, you need to examine every critical step in the process of opening and operating, and make sure that you can teach the franchisees how to do them.  In today’s world, training is interactive and video and application based. Most workers just don’t retain information if published in a several hundred-page manual.  So, be ready to produce short training videos and on-line learning. If you are not ready to do so, be prepared to hire one of the industry leaders. Like www.ingage.net or www.tortal.net to assist you.

6. Systemize the business model.

You can’t really train properly, or expect consistent results, if the business operations are not systemized: This means nearly every aspect of the business development, operations, marketing and sales needs to be mapped out.  Very often, this process is not only valuable to preparing to franchise, but will greatly improve the operations of your core business.

7. Prepare a clear plan for identifying potential franchisees and marketing franchises.

Franchisees do not just fall from the sky. You market to them just like any other product or service sold.  So be prepared to spend money and time on a great franchise sales website, to choose a marketing strategy (like using brokers, trade shows, SEO, local marketing, etc.).  But, selling franchises is also unlike selling other products.  Franchisees become integral parts of your business.  You can’t sell too many too quickly or you will not be able to keep up with their needs.  And, often, choosing the right partners to help sell the franchise can mean the difference between selling just a few, or as many as over 100 in a year.

8. Pick your franchisees carefully.

Understand that franchisees are not employees.   What makes someone a great employee does not necessarily make him or her a great, or even adequate franchisee.   Franchisees need the entrepreneurial spirit to take economic risk, but cannot be such mavericks that they don’t follow directions.  Franchisees need to fit your brand culture, have adequate resources, professionally and economically to meet your requirements.  Ask yourself:  Is this franchisee right for our brand? Do they have the financial strength for one or more franchises? Short term and long term, do you see this franchisee being a building block for your system, or a fly in the ointment?

9. Choose the Right Locations or Territories.

Like franchisees, picking the right sites and territories is critically important.  Great brands cannot flourish where the ground is not fertile.  So, does the site or territory have the right density and type of demographics? Is it a good area or site to start? Is it too far away from headquarters? Is it somewhere you can easily access to provide support?

10. Get good legal and consulting advice.

Good advisors can help with each of the tips above, but great advisors can use them to help you flourish!  There are many legal and business issues you haven’t thought of, or might not until you make a costly mistake.  But, there are many bargain basement consultants who wish to sell you on every fix, but offer little real assistance to you.  Others may tell you just to copy a competitor’s franchise offering.  That’s a mistake on many levels.  So, don’t go it alone or try to reinvent the wheel.  There are many laws and regulations that impact franchising, not the least of which is the requirement that you prepare a Franchise Disclosure Document for use in making sales, and get registered in many states.  Often, efforts to save a buck result in copying others’ work and violations of franchise, trademark and copyright laws.  These can be costly lawsuits.  So hire great legal help.  If you need help, you can start by contacting me at 813-337-6652 or Scott@franchiselegalsolutions.com.

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