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Steps To Franchise Your Business

The good news is that there is no shortage of advice on ways to franchise your business. Alas, that’s also the tricky part. You can easily fall prey to information overload and analysis paralysis. One of the best pieces of advice for franchising is to find experienced and trusted resources and do your homework.

Here the process to franchise your business is broken down into manageable steps.

  • Research and determine if your business fits into franchising:  The most important component, aside from the financial feasibility of the business, is making sure you can teach your methods to others. If your business is something that very few people can handle, it won’t work as a franchise. In general, restaurants tend to be the most common way to franchise. Check out this list of 100 global franchises. Eight of the top 10 serve food. That’s not an accident. Service businesses tend to excel the most in franchising – restaurants, travel, and leisure especially.

  • Write or rewrite a business plan: Here, you carefully craft what your business does. You also create franchise agreements and set franchise fees. In this system, the franchisor facilitates the launch of various franchises in exchange for launch costs (typically $25,000 to $50,000) as well as ongoing royalty fees.

    By their nature, the Franchise Disclosure Document (known as the FDD) is very detailed, with 23 essential components. You should strongly consider tapping the resources of a franchise attorney to ensure you are building your franchise on a rock-solid foundation and have considered all “what if” scenarios. We cannot stress enough the importance of having subject experts and professionals on your team.

  • Determine your marketing and advertising strategy:  The key here is to create a smart strategy that is simple and manageable across franchise units and will drive business leads to your franchisees while providing ongoing promotion for your brand. You won’t get anywhere with complicated marketing because complexity hurts your recruitment potential. Most prospective franchisees want to enter something that is a) affordable, and b) straightforward.
  • Create Standard Operating Procedures (SOPs) for all your franchise units: Depending on your brand, your franchises may indeed be clones of your original business unit, or there may be some room for local market creativity. Either way, you must have a detailed operations manual with SOPs for hiring/firing, royalties, training, acceptable supply vendors, branding guidelines and often much more.
  • Develop all necessary training programs: You can’t train anybody until you have a training plan in place. Therefore, this step comes before recruitment. It doesn’t matter if your franchisees have years of managerial experience. They MUST know how to run your system, your way. McDonald’s, one of the most franchised companies in the world, doesn’t depend on the managerial ingenuity of its recruits. It requires them to perform the tasks precisely the way they want them done so that the customer experience is the same no matter where in the world you might buy that Big Mac. Hence, that company’s well-known Hamburger University.

  • Recruit, train, and empower new franchisees: This is where you really get the ship to sail. If you execute this step well, you’ll never find yourself alone on an island in your business endeavors. The budding entrepreneurs that you train should become the backbone of your business, perhaps there’s even a successor among your franchisees, should you choose to retire someday. Choose well, train well, and make sure you deliver continuous reinforcement in exchange for the start-up costs and royalty fees they pay.

It may seem like an insurmountable task, but FranchiseYourBusiness.com wants you to remember that franchising is one of the most enjoyable and powerful strategies to grow your business. Our agnostic, global resource center is dedicated to helping potential franchisors turn their ambitions into reality.