You’re thinking about turning your profitable business into a franchisor. This is similar to the decision you make when cloning your beloved pet. Exciting, right? Before you jump in, lets break this down into steps. Dive into the details at our in-depth discussion on “How to Franchise a Business.”
Get the house in order first. It’s important to have a solid business model. Consider it like baking a recipe. It’s important to get it right before you share it. Franchises will only exacerbate any problems that exist in your business.
The next step is to create an operational manual. The holy grail of franchisees is this manual. The manual should contain everything from standard customer service to opening procedures. Write instructions as if you were writing them for someone new to your company.
Next comes the legal part. The next step is to get a Franchise Disclosure document (FDD). The FDD is not just paperwork. It also serves as a legal document that informs potential franchisees about the business. You should hire an attorney who is familiar with franchising for the drafting of this document. Do not skimp on this document; it is crucial.
Money is the topic. The cost of franchising is high. Franchises incur initial expenses like marketing and legal costs, along with ongoing support. Make a comprehensive financial plan, so that you are aware of what to expect.
In terms of marketing, it’s important to find potential franchisees. You should use different channels, such as social media, franchise shows, or even word-of mouth. Your pitch should highlight why someone might want to invest into your brand.
The importance of training is also not to be underestimated. After you have franchisees in place, it is important that they receive thorough training to ensure their success. This is like teaching someone how ride a motorcycle. You cannot just give them the keys, and then expect them to not crash.
Support doesn’t stop after training. Consistency across all sites can only be achieved by regular checks and ongoing support. Establish systems of communication for problem solving and ongoing communication.
Don’t forget branding either! The key is consistency. Everything from the logos to how customers interact with franchises must be consistent. The reputation of your brand depends on this.
Take my word, but don’t be afraid to ask others! John’s Coffee House, a franchised small cafe turned nationwide chain. John’s Coffee House began with a manual that explains how to make the best cup of coffee.
A lawyer with experience in franchising law was hired to prepare his FDD. He launched marketing campaigns to target coffee lovers that wanted their own cafe, but had no idea where to begin.
John created comprehensive training courses that cover everything from managing the inventory to making espresso shots. He also ensured his unique brand charm was maintained across all stores through frequent check-ins.
That’s it. The process of turning your small business into a franchisor is not an easy one, but it’s worth the effort.
You have questions or suggestions? Leave them below in the comments!