How To Turn Your Business Into A Franchise
Many fast food businesses have good business models that make them ideal for franchising. But the truth is that if your business has a proven system for making money, it can be franchised. Does yours pass the test?
Besides a good business model, a business should have a strong brand that’s recognizable by many. It needs to be marketable and have a net operating income of at least 15% after payroll and other deductions. It should also have systems in place so that your business can be replicated multiple times. As a business owner, you’ll also need to provide support and training to the franchise owner.
If your business meets all the requirements, then franchising may be a possibility. Here is the process you need to follow.
Create a Franchise Model
Determine what you will offer franchisees. This may include specific rights, territories, and terms of agreement. You will also need to determine a marketing plan, royalty percentages, and the requirements for franchisees. In addition, you will need to figure out if you will supply the equipment or if the franchisee will need to buy it from you, as well as the amount of training and support you will provide. You want your franchisees to be successful, since that makes you money as well.
Prepare a Franchise Disclosure Document
Prepare and finalize your franchise agreement and franchise disclosure document (“FDD”). Although 14 states require the filing and registration of your franchise, most do not. With your FDD in place you can start selling your franchise in the non-registration states, like Florida. If registration is required, be forewarned that the approval process could take time. While Florida does not require registration, franchisors must file a Franchise Exemption Notice on an annual basis. The cost for this is $100.
Get a Team in Place
Have a team dedicated to franchising, since you don’t want to spread your employees too thin. This could make you lose money and make your company look unattractive to franchisees. Consider various departments to help with the franchising tasks. For example, competent managers can keep franchisee relations running optimally. A trainer can provide ongoing support for franchisees and a sales team can answer questions that potential franchisees may have. Delegate as needed to keep profitability up.
Once you’ve completed the above steps, you’re ready to start looking for entrepreneurs who are interested in your business. You’ll need to come up with a marketing strategy to sell your franchise and get investors excited about the opportunity. Create trust and credibility with prospective franchisees.
Learn More About Franchising
If you think you have a franchisable business, you could have a profitable opportunity on your hands. Start setting up the process so that others can take advantage of your business model and make money for themselves and your business in the process.
Orlando franchising lawyer B.F. Godfrey from Godfrey Legal can advise you on the legal aspects of franchising and make sure the process goes smoothly for optimal profitability. To schedule a consultation, call (407) 890-0023 or fill out the online form.