Are you thinking about franchising your business but don’t know where to start? There are so many things to do before franchising a business, and many of these tasks should be completed before business owners even take the first application from a franchisee. Preparation and knowledge are key to this big step in your business’s operations.
Expansion is about more than capital and a product. It is about representing your product. Planning ahead is a vital part of the process because franchises often take 3-5 years to start showing the franchise owner a profit. With a good plan in place and a willingness to support your franchise satellites, you can ensure your business expands smoothly. Here are a few things you need to start:
Outline Your Business
One of the most important things to determine when considering franchising your business is how the business operates. This includes large decisions, such as production procedures, or small ones, such as who to call for office supplies. Having this type of procedure planned out sets guidelines for every subsequent franchisee to follow, and should be based on your own operations. Often the best way to accomplish this is by assembling a business plan. A well-written business plan includes operations, financials, immediate and long-term goals, and a mission statement. The more detailed your business plan is, the fewer details you will find yourself worrying over later. This is also helps with the legal aspect of franchising.
You are more than likely an expert in whatever business you’ve are planning to build a franchise in, and you became an expert through years of experience and education (whether from college or the School of Hard Knocks). When it comes to franchising, there are experts who have experience specifically in franchising, and consulting them is both recommended and required. An attorney is important to handle the legal paperwork, and an accountant can help you determine your rate of reasonable growth based on your available capital. Franchising consultants have experience helping businesses branch out and can offer valuable resources and assistance in planning. The International Franchise Association also has a wealth of information. You don’t have to grow your business alone!
Understand the Role of Your Franchisees
Before you look for your first franchisees, you need to understand what their job actually is. Remember that you are looking for people that are going to represent your business, so you need to have people you can trust to uphold the company mission statement. How little or much you choose to restrict their operations will also determine who you look to as a potential franchisee because you want to ensure you find people who will follow your rules. Delineating the role of your franchisees should be detailed in your business plan, and also in a clear contract with franchisees. Going into this, you need to know what you expect from them.
Be Involved in the Business
Another thing you need to be clear about in advance is your role in growing the franchise. A franchise is an extension of your business, and there is a share of running it that will still fall to you. Even owners of huge international businesses visit their franchises and are ready to provide things like support and training to the employees. Determining what kind of support you are going to offer is a balance of knowing what you can handle and what you expect your franchises to handle, but the more support you can offer the better your franchises will run. This is especially true if you expect franchises to remodel or redecorate, or make other costly changes.
There is a great deal of information and support out there for businesses who want to expand into franchises, so as a business owner, you don’t have to go it alone. Franchising is a complicated world, with reams of laws and procedures to both follow and make. The right experience, guidance, and effort can lead you through all of the confusion and help develop your business into a lucrative franchise!