Expanding a successful business can be done in many ways. The most common perhaps, is going into franchising. Franchising, in dictionary definition is a form of business in which a company with successful products or services enter a relationship with an individual or another company to operate under the trade name of the said company (franchisor) for a fee. In this case, you have the successful business, you are the franchisor and what you need is the proper guidance to franchise your business.
It is important to seek information about the franchising world before getting into one. The Franchise Council of Australia is a great resource.
You need to understand that although you are already an established trade name, getting into franchising is like being new in the business world. It will require patience and finances. There are requirements that need to be met that are vital for the credentials of your franchise business. Here are some of those requirements:
In the legal department, like any other business, you need to get a good franchise lawyer to meet legal necessities such as requirement documents. First, you will need to prepare a document known as Uniform Franchising Offering Circular (UFOC); this is basically a disclosure document on the operation of your franchise business. The UFOC is an important document as it is required by the Federal Trade Commission for all companies that want their businesses to be franchise anywhere in the United States. Furthermore, there will be some states that would require you additional documents for you to be able to offer a franchise business in those states.
Under one of the disclosure requirements mentioned above is an audited financial statement for the franchise company. This means that you will not be able to complete legal without preparing you’re audited statements. You will have to seek the help of an experience franchise accountant to audit your statements. These financial statements will need your final decisions on what the structure of the enterprise should be and on whether the franchise company will be on a different name or under the name of the already established company you have. You will have to seek advice from your accountant about this.
The system of your franchise company plays a vital role in making the company a success. Note that all your franchisee should offer the same experience as everyone else inside your franchise business. In order for the franchisees to do this, as franchisor, you need to develop four things for the franchisee. First, you need to develop the system itself that all franchisee will be able to use to ensure the success of their business. Second, you should be able to develop a great training program needed to educate franchisees. Third, make a great marketing plan that would enable the franchisee to learn the art of customer pleasing. Fourth and last, you need to devise a sales system that is easy to understand so it would be easy for you to recruit new franchisees. This part of the franchising business is a lot of work but it is also the most important and it should be given the attention it needs. You can’t do this all by yourself so you will have to ask assistance from franchise consultants that have a great track record.
In everything that you do, you need to have the right attitude; the right mindset and the optimism that you need to become successful. Like everything, getting into the franchise business also needs this. A franchise business is different from having your own business. You will be dealing other businessmen in the franchise world, they are not your employees, treat them as if they are your clients, and like any clients, you need to take care of them. You work hard to recruit them and you will work harder to make them stay and to trust your brand name. There will be resistances and you will experience some bumps in the road, but with the right attitude, you will be able to get through with it. Take advantage in franchising seminars and industry meetings where you will be able to meet other franchisors, this way you will learn from them the ropes in the business. Deal with people with the right attitude and you’re on your way to success.
These four elements are the things that you need in order to produce a successful franchise business. Know that creating a franchise business would need extreme work, patience and finances. It is true that starting a franchise business is expensive. Never settle for mediocrity, and that’s why you will have to hire the best consultants, the best lawyer and the best accountants. Yes, it will be expensive and you’re probably going to work harder like you’ve never work in your life.
All these sacrifices will pay off. Keep in mind the satisfaction and reward you will be reaping after building your very own empire. It will be incredible and it will be the ride of your life, but like any ride, you will have to pay the price. Prepare for this journey and make sure you are ready for this ride.