Franchising your business possesses fantastic rewards, from a greater return on investment to risk reducing and holding of capital. But prior to you begin the process of franchising your business, you must 1st ascertain if your concept and operating system is franchisable.
Primary tenants of franchisability include:
Uniqueness. Your business must possess adequate differentiation from other franchises either in terms of products and services, marketing, smaller investment cost, or target market.
Straightforward operations. Your system and business model had better be relatively easy for a new franchisee to learn in a small time frame.
Strength of management. Even the most successful company will waver without a strong management team in position.
Adaptability and requirement. Your concept had better adjust easily to numerous locations and in that respect should be sufficient demand for your products or services.
ROI. A franchised business should bear sufficient profit after paying fees and royalties to earn an adequate return on investment.
Credibility. A franchisor must be credible to prospective franchisees.
If your business passes this litmus test, you will need a franchise plan and a business plan. A franchise plan is not the same as a business plan. Essentially, the franchise plan is a plan for franchising your business, detailing all of the steps you will take, as well as the franchise fee. The business plan outlines your overall business strategy over the next five years.
Next you will need an operations manual and training programs for your franchisees. In order to legally sell franchises, you must draft a franchise agreement and a Franchise Disclosure Document (FDD) and file with the appropriate state and national authorities. A franchise attorney can help you create these documents and meet the legislative requirements.
One of the main reasons franchising is attractive to franchisees is that they are buying the rights to use an established trademark and/or brand name. If you have not already done so, make sure that your intellectual property rights are available and register them.
In order to sell franchises, you will need a marketing plan. Marketing efforts could include a sales campaign, such as direct mail initiatives, franchise sales brochure and collateral, a sales videotape, a Web site with franchising information, paid placement on franchise opportunity Web sites, listing with a franchise brokerage firm, and trade show participation.
As you can tell, having the thought to franchise your business and actually franchising your business are two completely different things, they are worlds apart.
It takes a lot of hard work to get your business franchised. in the long run it is worth it so the hard work put in to make it work would be highly worth it.
There are plenty of websites out their that will help with all aspect of franchising if you needed assistance.
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