A Checklist for Franchising your Business
Companies have been franchising for more than 50 years now, with widely varying degrees of success. Make no mistake: franchising an existing business is a major undertaking. There are all kinds of details to consider, including geographical and operational issues, the question of competitors, the level of financial investment you'll require of your franchisees, and much more.
Services like Acurate Franchising can
guide you through each stage, but you'll want to get some understanding of the
process first; hence the checklist below.
The Checklist for Franchising a Business
We thought it might be useful to break the process down into a to-do list for the prospective franchisor. This isn't meant to be an all-inclusive guide by any means, but the list below should give you a solid idea of what lies ahead.
- Legalities - Prepare a standard disclosure document. At minimum, the FTC requires every franchise to have a Franchise Disclosure Document (FDD) before offering franchises for sale in the U.S. Some states have additional registration requirements and peculiarities of their own to consider. Put it this way: expect to think about your business inside and out, and have literally hundreds of business issues spelled out in print.
- Financials - Prepare audited financial statements. This is actually a required part of the FDD, so until your statements are audited, you won't be able to legally proceed with franchising. You'll need an accountant with experience in producing these audited statements.
- Systems - This is the heart and soul of any successful franchise company. Every aspect of your business must be developed to the point where it can be easily described, standardized, and replicated. Then every detail must be documented.
- Training - You will need a training program, plus qualified people to provide the training. The better your training program, the more successful your new franchisees will be.
- Marketing - Formalize your marketing plan. You'll need two sales systems: one for your franchisees to follow that will drive customers into their units and one for you to use to recruit those new franchisees and generate revenue (from franchise fees and, hopefully, ongoing royalties) as a franchisor. Prepare marketing materials that can be easily understood and duplicated.
- Quality Control - Create checklists, policies, procedures and tactics to ensure your systems are uniformly enforced.
- Attitude - This is perhaps the most important item of all. You must be focused, positive, flexible, and dynamic -- all at once and all at the same time. In practice this means expecting a challenge and stepping up to overcome any obstacles in your way.
Services to Help you Franchise your Business
While creating a franchise concept is a complicated and all-consuming process, the rewards -- financial, personal, and otherwise -- can be enormous and compound favorably through generations (just ask anyone whose parents or grandparents started a successful franchise system)!
Fortunately, you don't have to go it alone. The most successful franchisors recognize their areas of knowledge and strength as well as the areas in which they would be best served utilizing the services of domain experts, such as franchise lawyers, accountants, and consultants.
Breaking Down an FDD
Once you've found a franchise (or multiple franchises) that you are interested, the real research and diligence process begins. You need to figure out whether the franchise you are looking at really makes sense for you from a financial and lifestyle perspective. Your best source of information for all of this is the Franchise Disclosure Document, or FDD.
Why Are Other People Opening Franchises? And Why Should I?
This came as a little bit of a surprise to me.but at the end of the day it makes sense. Franchises might be a good opportunity for people to make a change in their lives, but at the end of the day they are a major investment. And as with all major investments you’re probably making it with the intention of making money. So if you are thinking of opening your own franchise to make more money, have more flexibility, or have a more fulfilling career you’re not alone.
Best Practices in Protecting and Enforcing Trademarks, Copyrights and other IP
Trademarks, copyrighted works, trade secrets and proprietary business information form the core of any franchise system, and are frequently a company’s most valuable assets. Trademarks, including service marks, logos, slogans and trade dress, define the brand identity as presented to the public. The “behind the scenes” business know-how on which the system is built and implemented by franchisees is embodied in a variety of copyrighted and proprietary works – operations manuals, proprietary processes, recipes and formulas, custom software, advertising copy to name a few.