You can expand your business at a very fast pace in many different ways. Franchising is one of those ways. It has become a popular method that has been embraced worldwide. What happens is that you use another person’s business philosophy after paying for the rights to use it. The franchiser will grant you the rights to make money by distributing its products, trademarks and techniques. They get a certain percentage of your gross monthly income as well as a royalty fee. Can you franchise your own business? Well, it will depend on how your business operates. If your products are unique or can be replicated then you can do better with a franchise.
Does Franchising Make Sense?
Franchising a business sounds like a good way to expand, it’s not right for all business. Your business should be profitable and your business model must be a model that can be duplicated successfully. I should also be a model that can return an adequate return for the franchisee.
If you are a new startup, in most cases, franchising doesn’t work. Due to the fact that franchising a business will require you to supply materials, office supplies, and business plans, in most cases, new startups are not in a position to franchise their business model.
Do you know how your business operates precisely? As a franchisee you will require the exact details to get your business running. Although it takes long, planning will help your business operate smoothly particularly if you decide to franchise it. As a franchisor you should ensure that you have an operations manual that clearly spells out your detailed policies as well as best practices.
Get Legal Advice
If you want to franchise your business you will require some legal advice. There are some important points of franchise law you should familiarize yourself with. You will also need to fill out documents such as the franchise disclosure document with the help of an attorney. Some processes like setting price, creating a franchise agreement as well as determining intellectual property protection can’t be done in the right manner without the help of an experienced attorney.
Develop Your Franchise Model
Most people are familiar with the traditional model of franchising a location. There are many different types of franchise models available. Here are the most common:
Business Format Model-This is the most common type of franchising model. In this type of franchise, a company expands by supplying independent business owners with an established business, including its name and trademark.
Manufacturing-In this model, a franchiser grants a manufacturer the right to produce and sell goods using its name and trademark.
Product Franchising-In this agreement, manufacturers allow retailers to distribute their products and to use their names and trademarks.
Some other important decisions you will need to make are whether your franchise is going to charge a franchise fee or a royalty percentage, the geographical locations of the franchises and how you will market them.
Choose Your Franchisee Wisely
When choosing franchisees you should be extremely careful. You will find a lot of people with capital and you will have to be very careful again to determine if they are the right kind of people. Check their background to find out if they have the ability to successfully run the business. These people will be representing you and they have to do so accordingly. Your main reason for franchising your business is to protect and grow it. Come up with an interviewing procedure so that you end up working with only the people that meet the standards you have set.
Grow and Protect your Business
Your brand is your most valuable asset and as a franchisor you should work hard to grow and protect it as much as possible. You have worked very hard to earn your brand a good reputation. The biggest risk when it comes to franchising is that you give other people the opportunity to represent your brand.
Ensure that you have laid out guidelines that will control the usage of brand assets. Some people may take advantage and use your brand assets inappropriately if you haven’t laid down such guidelines. Nobody should take advantage and use your brand assets inappropriately or without your authority.
To be successful ensure that you monitor pictures, videos and social media outlets regularly and in a detailed manner.
Offer Support to Your Franchisees
You will have to meet your franchisees personally or talk to them every now and then via the phone or online. Do everything you can to motivate them when they have made an achievement. Share with them important information and also make sure that they have a way to communicate with one another.