Have you been able to build a successful business model overtime that can survive beyond your present location? Is your brand known and well accepted in your area of operation? If you answered yes to these questions, then you may consider leveraging on a franchise to expand your business frontiers, so as to make some great profits.
How do you expand your business without using your own money or borrowing money from the bank? How do you start a business franchise? The answer is franchising. The franchise industry is one of the biggest and rapidly growing industries.
Most people are now aware of the risk of starting a business from scratch and how franchising comes to the rescue. That’s why McDonald’s, Wendy’s, KFC, TFC, MrBiggs, StarBucks, etc are big and very popular today. Most banks don’t lend money to startup businesses, but they would wholeheartedly lend money to new franchise companies. WHY? Well, that is not the topic for the day.
What is Franchising?
Franchise is simply selling your business model and brand to someone that can run same business in other locations. The terms and conditions for various franchises may differ, but the fact remains that in most cases, it is a win – win for both parties. With the advent of franchising license, people who have capital but are scared of starting their business from the very scratch can easily own a business and make good profits from it.
So if you have done a proper research, and it is obvious that your business model can easily be run by someone in a different location without your supervision, then you should consider franchising your business cum brand. It is indeed one highly workable strategy that can help you capture new market. The following points would l help you franchise your company and guarantee you good returns on your business.
How to Franchise your Company and Grow Fast – A Beginner’s Guide
1. Check if your business is qualified for franchising
Almost any business can create a franchise. However, to ensure that the venture is rewarding; these questions must be considered first:
- Is the business unique or one of a kind?
- Is the business trustworthy or reliable?
- Does the business give sufficient returns?
- Can the business operation procedures be easily taught?
If the answer to the all of these questions is “yes,” then you can proceed to the next step.
The first port of call in your quest to franchise your company is to revisit your business plan. Your business plan should be able to guide you on the kind of expansion that suits your business model and all the options that is available to you. The fact remains that if you have a comprehensive and highly workable business plan in place; it becomes a lot easier to talk investors into buying a franchise from your company.
As a new franchise holder, you should not only know how to start a business, you should also be aware of the business growth rate, set-up fees, staff requirements, and support services needed to successfully operate the franchise. Strategic planning for business growth is important in order to gain huge rewards in the future.
5. Be Deliberate About Building a Workable Business Model and Highly Sellable Brand
From the very first day you start your business, ensure that all the process of running the business is well documented and easy to understand. Any employee that picks up your Standard Operating Process (S.O.P) of any unit of your business should be able to understand it and work with it with only a minimal training or orientation. You should also be deliberate about building a brand that can easily be accepted by the public. The truth is that the perception the public have of your brand is a key factor that will determine how easy you can sell your franchise.
If you intend selling the franchise of your company, it would not be a bad idea if you deliberately test the waters to have a first – hand information of the acceptability of your brand outside your business location. What you might need to do is to hire experts to help you design questionnaires that may help you get facts about your brand.
The questionnaires should be administered in the location where you intend branching out to. You are required to pay some professional fee, but the result you get from the exercise will help you market your franchise to potential investors especially if the reports are favorable.
7. Close Study and Closely Monitor Businesses That Have Sold Franchise
Franchising might be one of the easiest means of expanding your business frontiers and making huge returns on your investment, but the truth is that it can cause you sleepless night if some things go wrong. The best thing you need to do if you intend leveraging on franchise to gain market share is to study and closely monitor existing businesses that are into franchising. If you do this, you will be able to know the challenges they face and how you can map out strategy to overcome such challenges when you start selling your own franchise.
8. Hire a Lawyer to Help You Draft the Terms and Conditions
No doubt franchising your business can be challenging and cause an outbreak of troubles if you sell your franchise to a wrong investor. Also, if your terms and conditions aren’t clearly stated in the contract there might be an issue. It might pay you to know that there are lawyers that are specialized in drafting terms and conditions for businesses that sell franchise, look for such lawyers and hire their services.
9. Prepare the necessary legal documents and requirements
To legally sell a franchise within the United States, you need to obtain a UFOC. The UFOC or Uniform Franchise Offering Circular is a standard disclosure document that is required by the Federal Trade Commission. A franchise contract is also needed.
In addition, you should also check if the registration requirements of their respective states are being met. For any difficulties regarding handling legal matters, you can simply consult with a franchise attorney or preferable someone who knows and understands how to start a business franchise.
10. Create and Implement Strict Quality Control Guidelines
A person that wants to start a business must be aware of the importance of product quality. A comprehensive operations manual needs to be drafted and distributed to new franchise holders as a means of maintaining product quality. This manual should include the policies, strategies, rules, and checklists needed to run the business franchise successfully.
Additionally, the manual should also have provisions for handling business issues (e.g. accusations of negligence) to protect against potential liability. Once the manual is finished, thoroughly introduce and discuss the manual during training programs with your proposed franchisees.
If you have done your proper homework, and you are convinced that franchising your company is the right thing to do, then you should employ all avenues to market and sell your franchise to potential investors. Start by word of mouth and work your way up.
Print out brochures and sales pamphlets or create a DVD. You can list your franchise on online platforms that advertise businesses and has franchise up for sale. You may consider the option of both print and electronic media to advertise your franchise, you can approach potential investor to market your franchise, and you can as well attend exhibitions to market your franchise.
12. Mentor and Train Those Who Bought Your Franchise
It is important to note that if you intend that your franchise to do well in the marketplace, you must design training models that can help those who buy your franchise to hit the ground running. In as much as all the processes and recipe (in some cases) of running your business will be documented and handed over to the person that buys your franchise, it is very important to set aside days for training of key staffs on how to run and manage the business.
You can also create a mentoring session for those who bought your franchise. The truth is that there are competitions out there, and if your contract agreement is loaded with this largesse, then you will have the upper hand in the marketplace amongst your competitors.
No doubt franchising your company is your sure bet to make money, but you must endeavor to critically study the above points coupled with a bit of research work if you truly want to make an outstanding success from franchising your business. Just make sure that you have thought through it and are convinced that franchising your business is the way to go by saving yourself the stress of going through the process of planting a branch of your business in a different city.