Franchising is a great way to grow your business, often allowing you to expand locally, interstate and even internationally. Here are some key steps to franchise your business.
How to franchise your business
You want to grow your business and know franchising is one option. But you are worried about what it will cost, and you’re not exactly sure what’s involved.
Franchising is a great way to grow your business, often allowing you to expand locally, interstate and even internationally. But it can be costly, takes a lot of work and if you don’t get it right, it can fail – horribly.
So how do you:
- decide franchising is right for you and your business
- find out exactly what needs to be done up front so you know what you’re up for
- find out exactly how much this will cost
- work out who is the right expert to help you through all the pitfalls
- find out exactly what franchising is about?
You’ve probably heard the story of how I started and grew six new franchise groups with more than 120 outlets over a five-year period. Over the last three decades I have also helped dozens of businesses franchise successfully, increasing profits and allowing their owners to work fewer hours and get their lives back.
Franchising can be made simple
Along the way, I also discovered franchising is not just about the documentation or the product, and that franchising can be made simple.
Converting a business to the franchise model involves creating two new businesses – one for your franchisees, similar to your existing business, and another for you as franchisor, to manage the whole group.
To do this you need to get some crucial things right before you begin, such as budgets, territories and marketing. And notably, you need to be sure there is enough money in the pot to keep you and your franchisees profitable and happy in the long term.
Not getting some crucial aspects right at the beginning means your new franchised business will not succeed. But get them right and you will grow your business exponentially.
Franchising is not just about the documentation or the product, and it can be made simple.
Seven simple steps
I like to work through seven simple steps when franchising a business.
These include:
1. Learn about franchising
Before you begin you need to know how franchising works.
2. Check feasibility
Is your business suitable for franchising and do you have the business skills, the confidence and personality to make it work?
3. Develop the franchise model
Hone each key aspect of your existing business (marketing, budgets) and look at how these things will form the foundation of your franchise, becoming building blocks for territories, franchisee recruitment, induction, training and communication programs.
Then prepare a series of documents to establish responsibilities for you as franchisor, and for your franchisees as you develop the business as a franchise.
These form the basis of the legal agreement between the two parties.
4. Build your franchisor business
Before you can begin, you will need to get the various parts of the franchisor business up and running so you have the necessary support in place for your crucial first franchisee.
5. Establish a pilot franchisee operation
You will need to either systemise your existing business or develop a new one to show that you can operate the business successfully as a franchise outlet before you sell a franchise to a franchisee.
6. Recruit franchisees
Advertise, select carefully and sell the first outlet to a separate franchisee. Keep going until you have as many as you need.
7. Manage your franchise business into the future
Now you are up and running, your job is to provide ongoing training for your franchisees, make sure they keep the brand alive and that they are performing well. Critically, you are also responsible for continuing to develop the franchise business as a whole, keeping it current and fresh.
Brian Keen, How To Franchise Simply
