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Franchising a Business “An Overview”

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For business owners considering franchising their existing business here is a straightforward outline of the franchising process.

Franchising provides the financial and operational leverage to grow and develop a small business. Franchise system growth can be limited to a geographic area or nationally and it can provide growth and opportunities for ownership and employees. For the proper franchise system international expansion is a definite possibility

Attributes of Successfully Franchised Businesses

Have a unique appeal A business operation that can be systematized Sustained profitability A product that’s a trend not a fad. Operating the business is not complex Owners have the capital to establish and launch a franchise program Typically the business has broad market appeal but it’s not an absolute requirement Franchisee can earn a reasonable ROI

The Three Stages of Franchising

  • Stage 1: Building the franchise program
  • Stage 2: Launching the franchise
  • Stage 3: Managing and developing the franchise network

“If problems arise it’s usually during Stage 2”

Key Steps in the Franchising Process

Conduct a feasibility study to determine viability of franchising the business. Establish a plan and set timetables. Do a competitive review and market analysis. Layout and write the operations manual. Construct the Franchise Disclosure Document Enhance the website with a franchise site Design basic marketing materials Establish franchise development strategies Audit financial statements.

Preparing Your Business to Franchise

  • Register your trademarks and domain names
  • Confirm that the business can be franchised
  • Have clean financials that can be analyzed
  • Source sufficient capital
  • Plan staffing needs
  • Implement strategic, software and operational changes with franchisees in mind
  • Have a sound website platform
  • Set up a new corporation

The cost to franchise an existing business can range from $50,000 to $100,000 or more depending upon the complexity of the business.

© 2012 FranchiseKnowHow, LLC

Ed Teixeira is the President of FranchiseKnowHow, LLC. He can be reached at franchiseknowhow@gmail.com

 
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