Five Points to Consider When Franchising Your Business
Franchising your business is a great way to bring extra cash flow into your company, cash flow that will only increase over time as the profitability of your franchise model starts to become known and you attract more and more likely prospects to run a franchised branch of your company.
That said, going down this route is by no means an easy task. Though the rewards can be wonderful, the risks and sheer amount of hurdles you can come across along the way (not to mention paperwork) can put off the most dedicated business owner before you even get started.
For this reason, below we have compiled five points to consider when franchising your business, all five of which deserve a significant amount of your time if you wish to make a success of your franchise model. Without further ado…
1) Ensure Your Company is Ready
This is the number one step in which business owners slip up, and therefore deserves to be the number one point in this list.
Ensuring your company is ready to franchise is much more difficult than you may think, as a vast number of points should first be considered. Some of the most important questions you should ask yourself include whether you currently have systems in place to duplicate processes, whether the franchisee will be able to make a good living from their franchise (after your fees have been paid), and whether your business is different enough from the competition for franchises to work in the first place.
2) Research Legalities
There are a vast number of legal requirements to stick to when starting up business franchises, many of which you would have never come into contact before while simply setting up the requirements of your single business.
Requirements vary from country to country, but be prepared for a significant amount of paperwork in the beginning, regardless of where you live. It will often help to bring a franchising expert into your office to help you on the legal side of things, so to ensure you stay on the right side of the law at all times.
3) Decide Your Model’s Key Points, Create Paperwork
Despite how complicated the franchise model may be behind the scenes, you must make your key points (your offering) as clear as day to prospective franchisees, and all these points must be decided upon ahead of time and drawn up in the necessary paperwork.
Though these points will vary significantly depending on what industry you operate in, some key questions you’ll have to answer are what the original franchise fee is, what the royalty fee is, and what geographic area your franchisees will be eligible to operate in.
4) Hire Staff to Handle Franchisees
Hiring staff to handle your franchisees is one of the most important things you can do during this whole process, yet so many business owners assume they can handle this element on their own.
If you currently work from an office in your city, you may wish to consider looking into finding some extra space in which your new staff hires will be able to meet and work with your potential franchisees to help move their business forward. There are a number of serviced office space providers out there that allow you to expand upon the office space you need as you go, meaning as your franchisees increase in number you’ll still be able to work with them from a spacious office environment as and when you need to.
5) Actively Sell Franchises
Don’t expect your franchise customers to come to you. In order to sell franchises of your business you need to get out there and actively pursue possible partners, often creating incentives along the way; such as offering a referral fee to current franchises who bring new partners into your company.
Once you have a new franchisee on board, ensure you meet with them at your office regularly in order to continually support them and help their franchise succeed.
your model’s key points, and hire franchise-specific staff ahead of time.In conclusion, franchising your business is a great way to bring extra cash flow into your company, so long as you ensure your company is ready, research legalities, decide