So, you’re planning to expand your business and thinking about franchising it. Instead of owning and operating multiple locations by yourself, you could offer the business model you’ve perfected as a franchise so that other hardworking and reliable entrepreneurs could benefit from it while you still earn.
Here are some tips to help you out:
Evaluate your business, especially if it has the potential to be franchised
Franchisees invest in franchise businesses with reputable, solid, and successful operations. Some businesses are naturally perfect for franchising since they thrive in different locations and workers could easily replicate their operations without having to learn and master complex skills.
Create a manual that details your business operations
This would give you better control of how franchisees should operate your franchise and help ensure quality control, explains a seasoned franchise development consultant. In addition, keep in mind that franchisees are investors, meaning you need to develop a prospectus with clear and realistic financial projections.
Advertise your franchise online, on trade magazines, and exhibits
When speaking to prospective franchisees, interview them thoroughly and focus on gauging their management skills and other skills relevant to running your franchise.
Figure out franchising fees
Calculate the initial fee first, taking into account premises costs, location and equipment requirements, supplies, advertising, and other associated costs.
Create a franchise agreement
This should specify the fees, duties of franchisees, franchise duration, termination details, and renewal terms. Do note though that your profit would generally come from royalties, which are usually 10% of the turnover, charged on franchisees over the life of the agreement. However, some franchisors opt to charge markups on supplies instead.
Conduct a training program based on your operations manual
This way, franchisees would know exactly how you want to operate your franchise and discourage those who would want to experiment in ways that could damage or weaken your brand.
Provide ample support to franchisees
This could include staff training, invoicing, advertising, market research, and others to promote open communication and strong relationships with franchisees.
If your business is stable, profitable, successful, and provides valuable services and products to consumers, perhaps it’s time to expand and offer it for franchising. But as you could see, franchising your business isn’t that easy. So, get organized, plan well, and get professional help when necessary. If you do it right, you can increase your profit, help other people succeed, and obtain a bigger customer base.