Okay, so you have started your business and its going great! You are thinking about expanding, but you are not sure what direction you want to go in. Here are a few things to think about, are you truly ready to open a new location on your own? Are you prepared to manage the day-to-day actives? Do you need to free up more personal time to balance your life? Do you have people asking to you open a business in another city and state?
If you are able to answer yes to most of those questions then I suggest you consider franchising your business.
Of course, most of us only recognize franchise companies such as Dunkin Donuts, Subway, McDonalds and Pizza Hut. Never in a million years did you think that when you started your business that it could be franchised, did you? Well after today that question won’t seem as obscure.
What is a franchise? According to International Franchise Association (IFA),
“Franchising is simply a method for expanding a business and distributing goods and services through a licensing relationship. In franchising, franchisors (a person or company that grants the license to a third party for the conducting of a business under their marks) not only specify the products and services that will be offered by the franchisees (a person or company who is granted the license to do business under the trademark and trade name by the franchisor), but also provide them with an operating system, brand and support. “
To begin, ask yourself if you have a strong brand and consumer base. If your answer is yes then you are off to a good start. Next you’ll have to do your research. Consult with someone with franchise experience and an IFA representative. Franchising your business is a big deal. People who have been in your shoes can offer great insight on the process and ensure that you don’t make the same mistakes that they’ve made.
If you do in fact decide to expand your business through franchising, you are going to need a great attorney. You need someone who is well versed in franchise state and federal laws. You also need a Franchise Disclosure Document (FDD). A FDD is what a potential franchisee will have to read in order to learn about your business and its standards, structure, expectations and more. When entering into a licensing agreement you have to make sure all parties involved know what is expected them. Through working with an attorney you can achieve this while protecting yourself.
You will also need a great team. Even though a franchise is the responsibility of the franchisee, you as the franchisor still have to check in on them to ensure that things are running according to your brands standards. It’s important to commit to helping the franchisee. Their success and failure are direct reflections of your brand. Having a team of experts that can help you assist your franchisees will be most beneficial; you can’t do it alone.
This can be an opportunity to build your company for generations to come. A franchise will expose you to a broader market that you may not have normally reached prior to. Making money while you sleep, that is the life! Now Franchise away and we will see you at the top!