Easy steps to franchise your business and tread the route to rapid growth
According to the business experts, franchising your business organization is the proven route to swift growth but becoming a franchisor yourself is certainly not the ticket to success. Reports suggest that established franchisors like Taco Del Mar Franchising Corp. and Daphne’s Greek Café filed for bankruptcy protection as they couldn’t tackle their sparing expenses and their debt obligations. Opting for online debt relief options to avoid bankruptcy is certainly a way to consider but how many franchisors have the ability to repay even 40% of the debt that they’ve incurred in this challenging economy? The answer is ‘very few’. Despite seeing such records, there are many business owners who nurture the dream of seeing their business brand become a household name among a string of franchisees. When you franchise the right concept, it can accelerate your growth. Read on the concerns of this article if you’re eager to know more on franchising your business.
Explaining the steps to franchise your business firm
Being a successful franchisor entails taking some thoughtful decisions initially that can affect your business in a positive way in the years to come. You have to wade through a lot of legal paperwork in order to ensure that your business abides by the federal and state laws that regulate and bind the entire franchise industry. Here are the steps to take.
Assess whether or not your business is ready for it
The first thing to check is whether or not your business firm is suited to become a franchise. Apart from getting a track record of the past sales of your company, there are some other factors too that you have to check.
1. Considering the concept: Most successful franchisors are of the opinion that the concept of the business is taken into consideration and there should be a unique twist to the plan. Ensure that the concept actually appeals to all the end consumers and also to the prospective franchisees. The business also needs to be something that you can standardize and replicate.
2. Evaluate your financials: The successful franchises usually take those business organizations that are already profitable. They prefer companies with at least a couple of profitable units. Therefore, check your financials so as to be able to become successful.
3. Conduct a market research: If you rely on your guts that your business is about to be a smash hit in the industry, it is most obvious that the opposite will happen. Conduct a research and know about the consumer demand and about your competitors.
Know the legal requirements for franchising your business
If you wish to legally sell off franchises anywhere within the US, your business firm should successfully register a Franchise Disclosure Document with the FTC or the Federal Trade Commission. You will require giving details on your business, the audited financial statements, description of the business experience of the management team and the operating manual for franchisees. Apart from the Federal FDD requirements, there are some states that have different rules regarding franchisee selling and you should know them too.
Take vital decisions about the model of your business
While you prepare all the legal work, you also need to take important decisions about the way in which you’ll operate as a franchisor. Some key considerations include the term of your franchise agreement, the fees and royalty percentage of the franchise, the geographic location within which you’re willing to offer the franchises, the type and length of the training program and the marketing procedure of the franchises. All these decisions will affect your future profitability.
Register as a franchisor and start hiring your staff members
Once you complete taking the important decisions, submit all your legal paperwork and be prepared for the authorities to cross-check your documents. Despite the FTC may file the FDD away, you’ll then have to wait for the state approval. After getting approved, make the key hires to add to the staff members who will solely work to help your franchises.
Besides taking the above mentioned steps, you have to take solid marketing steps to drive the growing chain of franchisees. Ensure that marketing should encompass everything from radio, print ads and even the logo art on the vans of the companies.